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Canadian Solar Reports Fourth Quarter and Fiscal Year 2012 Financial Results

 Canadian Solar Reports Fourth Quarter and Fiscal Year 2012 Financial Results

PR Newswire

GUELPH, Ontario, March 11, 2013

GUELPH, Ontario, March 11, 2013 /PRNewswire-FirstCall/ --Canadian Solar Inc.
("Canadian Solar" or the "Company") (NASDAQ: CSIQ), one of the world's largest
solar power companies, today announced its financial results for the fourth
quarter and fiscal year ended December 31, 2012.

Fourth Quarter 2012 Highlights

  oSolar module shipments were 404 MW, compared to 384 MW in the third
    quarter of 2012.
  oNet revenue was $294.8 million, compared to $326.0 million in the third
    quarter of 2012.
  oRevenue derived from the Company's total solutions business represented
    12.8% of total revenue, compared to 21.5% in the third quarter of 2012.
  oGross margin was 5.0%, compared to 2.2% in the third quarter of 2012.
  oCost of revenue included a $6.8 million depreciation charge for
    underutilized assets, representing 2.3% of revenue.
  oDiluted loss per share was $2.43, compared to diluted loss per share of
    $1.01 in the third quarter of 2012.
  oNon-GAAP adjusted diluted loss per share was $1.01, compared to non-GAAP
    adjusted diluted loss per share of $1.00 in the third quarter of 2012. A
    table that provides a reconciliation of GAAP to non-GAAP measure is
    available at the end of this press release.
  oCash, cash equivalents and restricted cash balances at the end of the
    quarter were $564.3 million, compared to $690.8 million at the end of the
    third quarter 2012.

Fiscal Year 2012 Highlights

  oSolar module shipments were 1,543 MW, up 16.6% from 1,323 MW in fiscal
    year 2011.
  oNet revenue was $1.3 billion, compared to $1.9 billion in fiscal year
    2011.
  oGross margin was of 7.0%, compared to 9.6% in fiscal year 2011.
  oDiluted loss per share was $4.53, compared to diluted loss per share of
    $2.11 in fiscal year 2011.
  oNon-GAAP adjusted diluted loss per share was $3.04, compared to adjusted
    diluted loss per share of $1.68 in fiscal year 2011.

Fourth Quarter 2012 Results

Net revenue for the fourth quarter of 2012 was $294.8 million, down 9.5% from
$326.0 million in the third quarter of 2012 and down 37.8% from $474.1 million
in the fourth quarter of 2011. Total solar module shipments in the fourth
quarter of 2012 were 404 MW, compared to 384 MW in the third quarter of 2012
and 436 MW in the fourth quarter of 2011. Total solar module shipments in the
fourth quarter of 2012 included 15.7 MW in the Company's total solutions
business, compared to 21.1 MW in the third quarter of 2012 and 16.3 MW in the
fourth quarter of 2011.

By geography, in the fourth quarter of 2012, sales to European markets
represented 40.6% of net revenue, sales to North America represented 20.0% of
net revenue, and sales to Asia and all other markets represented 39.4% of net
revenue, compared to 47.9%, 24.9% and 27.2%, respectively, in the third
quarter of 2012 and 46.5%, 26.9% and 26.6%, respectively, in the fourth
quarter of 2011.

Revenue by Geography
               Q4 2012     Q3 2012     4Q 2011     FY 2012       FY 2011
               US$M  %     US$M  %     US$M  %     US$M    %     US$M    %
Europe         119.7 40.6  156.2 47.9  220.5 46.5  656.5   50.7  1,233.2 65.0
America        58.8  20.0  81.1  24.9  127.3 26.9  342.3   26.4  334.9   17.6
Asia and       116.3 39.4  88.7  27.2  126.3 26.6  296.0   22.9  330.8   17.4
others
Total          294.8 100.0 326.0 100.0 474.1 100.0 1,294.8 100.0 1,898.9 100.0

Gross profit in the fourth quarter of 2012 was $14.9 million, compared to $7.3
million in the third quarter of 2012 and $41.4 million in the fourth quarter
of 2011. The sequential quarterly increase in gross profit was primarily due
to higher shipment volume and a continued reduction in manufacturing costs.
The year-over-year decline in gross profit was primarily due to a lower
average selling price partially offset by lower manufacturing costs. Cost of
revenue in the fourth quarter of 2012 includes a $6.8 million depreciation
charge for underutilized assets, representing 2.3% of revenue. Gross margin in
the fourth quarter of 2012 was 5.0%, compared to 2.2% in the third quarter of
2012 and 8.7% in the fourth quarter of 2011.

Total operating expenses were $106.4 million in the fourth quarter of 2012,
compared to $41.8 million in the third quarter of 2012 and $62.9 million in
the fourth quarter of 2011.

Selling expenses were $25.0 million in the fourth quarter of 2012, up 16.8%
from $21.4 million in the third quarter of 2012 and up 18.4% from $21.1
million in the fourth quarter of 2011. The sequential increase in selling
expenses was primarily due to higher shipment volume as well as an increase in
headcount required to expand the Company's project development team targeting
opportunities in Japan, China, the U.S. and Canada. The year-over-year
increase in selling expenses was due to increases in transportation unit
costs, as well as increases in sales and project development headcount and
related salary expenses.

General and administrative expenses were $78.3 million in the fourth quarter
of 2012, compared to $17.0 million in the third quarter of 2012 and $36.8
million in the fourth quarter of 2011. During the fourth quarter of 2012, the
Company made an allowance for doubtful accounts totaling $31.2 million,
including $18.6 million relating to one customer in China with liquidity
issues. In addition, the Company also made a non-cash provision totaling $30.0
million for an arbitration decision made against the Company by the China
International Economic and Trade Arbitration Commission in favor of LDK Solar
Co., Ltd. (NYSE: LDK). The Company disputes the merits of the arbitration
award and continues to evaluate its legal options. The sequential and
year-over-year increase in general and administrative expenses was primarily
due to the provision for the arbitration decision and increase in the bad debt
allowance for doubtful accounts. Excluding the impact of the non-cash
provision for the arbitration decision and the bad debt allowance for doubtful
accounts, non-GAAP adjusted general and administrative expenses would have
been $17.0 million in the fourth quarter of 2012.

Research and development expenses were $3.1 million in the fourth quarter of
2012, down 7.5% from $3.4 million in the third quarter of 2012 and down 37.6%
from $5.0 million in the fourth quarter of 2011. The year-over-year decline in
research and development expenses was due to the successful completion of
several key research and development projects at the end of 2011.

Operating margin was negative 31.0% in the fourth quarter of 2012, compared to
negative 10.6% in the third quarter of 2012 and negative 4.5% in the fourth
quarter of 2011. The sequential and year-over-year decline in operating margin
was primarily due to the provision for the arbitration decision and the
increase in the bad debt allowance noted above. Excluding the above mentioned
non-cash provision for the arbitration decision and the bad debt allowance,
non-GAAP operating margin would have been negative 10.2% in the fourth quarter
of 2012.

Interest expense in the fourth quarter of 2012 was $9.9 million, compared to
$15.2 million in the third quarter of 2012 and $11.7 million in the fourth
quarter of 2011. The sequential and year-over-year decline in interest expense
was primarily due to a shift in the type of borrowings, with a higher portion
relating to the construction of projects, as well as slightly lower bank
borrowings in the fourth quarter of 2012. As the Company accelerates the build
out of its solar power project pipeline in Ontario, Canada, a greater
proportion of its short-term borrowings are being used to finance the
construction effort and the resulting interest expense is capitalized under
project assets and then expensed through cost of revenues when their sale is
recognized. Interest income in the fourth quarter of 2012 was $3.7 million,
compared to $3.6 million in the third quarter of 2012 and $1.8 million in the
fourth quarter of 2011.

The Company recorded a gain on change in fair value of derivatives of $2.3
million in the fourth quarter of 2012, compared to a loss of $5.3 million in
the third quarter of 2012 and a gain of $2.4 million in the fourth quarter of
2011. Net foreign exchange loss in the fourth quarter of 2012 was $10.8
million compared to a net foreign exchange gain of $7.0 million in the third
quarter of 2012 and a net foreign exchange loss of $14.1 million in the fourth
quarter of 2011.

Income tax benefit in the fourth quarter of 2012 was $3.3 million, compared to
income tax benefit of $1.8 million in the third quarter of 2012 and income tax
expense of $16.3 million in the fourth quarter of 2011.

Net loss attributable to Canadian Solar in the fourth quarter of 2012 was
$105.0 million, or $2.43 per share, compared to net loss of $43.7 million, or
$1.01 per share, in the third quarter 2012,and net loss of $59.9 million, or
$1.39 per share, in the fourth quarter of 2011. Excluding the impact of the
non-cash provision for the arbitration decision and the bad debt allowance, on
an adjusted non-GAAP basis, net loss attributable to Canadian Solar in the
fourth quarter of 2012 would have been $43.7 million, or $1.01 per share.

Financial Condition

As of December 31, 2012, the Company had a cash, cash equivalents and
restricted cash balance of $564.3 million, compared to $690.8 million as of
September 30, 2012. Operating cash flow was approximately negative $36.3
million in the fourth quarter of 2012, compared to negative $57.6 million in
the third quarter of 2012. Excluding the impact of the cash outflows for the
Company's previously disclosed acquisition of solar power projects in Ontario,
Canada, adjusted operating cash flow, a non-GAAP measure, was negative $13.0
million in the fourth quarter of 2012 compared to positive $11.0 million in
the third quarter of 2012.

Accounts receivable balance, net of allowance for doubtful accounts, at the
end of the fourth quarter of 2012 was $254.9 million compared to $257.8
million at the end of the third quarter of 2012. Accounts receivable turnover
was 92 days in the fourth quarter of 2012 compared to 79 days in the third
quarter of 2012.

Inventories at the end of the fourth quarter of 2012 were $274.5 million,
compared to $317.8 million at the end of the third quarter of 2012. Inventory
turnover was 106 days in the fourth quarter of 2012 compared to 102 days in
the third quarter of 2012.

Accounts and notes payable at the end of the fourth quarter of 2012 were
$461.6 million, compared to $462.8 million at the end of the third quarter of
2012. Accounts payable turnover in the fourth quarter of 2012 was 150 days
compared to 128 days in the third quarter of 2012.

Short-term borrowings at the end of the fourth quarter of 2012 totaled $858.9
million, compared to $890.6 million at the end of the third quarter of 2012.
Long-term debt at the end of the fourth quarter 2012 was $214.6 million,
compared to $224.2 million at the end of the third quarter of 2012.

As of December 31, 2012, the Company had $301.6 million in total stockholders'
equity, compared to $402.6 million as of September 30, 2012.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar,
remarked: "2012 was a difficult year for the entire solar industry. Despite
the headwinds, we maintained our practice of balancing the desire to expand
with the need for prudent business management and cost control. As a result,
Canadian Solar has fared better than most of our competitors. We have further
increased our market share, and rapidly established our total solutions
business with investments in the mid- and downstream segments. We have, at the
same time, achieved one of the lowest production costs among our peers, and we
also achieved a more evenly balanced geographic distribution. We are
especially proud of our success in the Japanese market where our shipments
tripled during the year. Moving forward, we are uniquely positioned as we do
not have to carry the baggage of underperforming polysilicon manufacturing
assets and the liability of large long-term supply contracts that some of our
competitors have. Our light manufacturing strategy combined with targeted
investments in our downstream total solution business puts us in a good
competitive position to emerge from the current industry cycle as a stronger
leader."

Michael G. Potter, Senior Vice President and Chief Financial Officer of
Canadian Solar commented: "Our fourth quarter 2012 financial results do not
fully reflect our progress given the non-cash charges that negatively impacted
our results. From an ongoing operations standpoint, we are encouraged with our
results. Sequentially, our solar module shipments were up, our gross margin
more than doubled despite underutilization charges, our inventories were
reduced by $43.3 million and our short-term borrowings were reduced by $31.6
million. We are focusing on profitability over growth and on markets where we
can generate the best returns. In addition, we are starting to see signs of
price stabilization across the value chain, which is reflected in our better
than expected gross margin in the fourth quarter. We are encouraged by the
rapid expansion of our total solutions business. Finally, we are pleased that
the groundwork that we have laid over the past several years has paid off with
our proven ability to finance the purchase of projects and their construction
before sale."

Utility Scale Project Pipeline Update

As previously announced, the Company acquired 16 utility-scale solar projects
from SkyPower Limited in June of 2012. During the fourth quarter of 2012, the
Company entered into an agreement with SunEdison Power Canada Inc.
("SunEdison"), a subsidiary of MEMC Electronic Materials, Inc., to acquire
four solar power projects for an aggregate transaction price of approximately
C$37.0 million (US$38.0 million). These acquisitions augment the 9 green-field
projects which the Company had previously been awarded, and expand Canadian
Solar's utility-scale pipeline in Ontario, Canada to 29 projects, totaling
approximately 400MW DC[.] Of these projects, 2 have been completed and are now
in the testing phase before completing the sale to an investor, 7 are expected
to be completed in 2013, 18 in 2014 and 2 in 2015. The Company expects to
recognize revenue using the percent of completion method for all projects,
except the 9 sold to TransCanada. As a result, of the 18 projects expected to
be completed in 2014, 15 will start construction and contribute to revenue in
2013. The Company estimates that the resale value of its Ontario project
pipeline, once built into grid-connected solar power plants and sold to
investors, will exceed C$1.50 billion (US$1.47 billion).

In addition to its own projects, the Company is currently in the process of
building three solar power plants totaling 29MWdc as Engineering, Procurement
and Construction (EPC) contractor on behalf of Penn Energy Renewables Ltd. The
Company expects to complete these projects in the second half of 2013.

In the U.S. market, Canadian Solar has expanded its utility-scale project
pipeline to approximately 255MW DC. In fiscal year 2013, the Company expects
to complete construction of solar power plants totaling 100MW DC in the U.S.

Business Outlook

The Company's business outlook is based on management's current views with
respect to operating and market conditions, its current order book, and the
challenging industry environment, which continues to result in customer demand
uncertainty. Management's views and estimates are subject to change without
notice.

For the first quarter of 2013, the Company expects photovoltaic module
shipments to be in the range of approximately 290MW to 310MW, with gross
margin expected to be between 8.0% and 10.0%.

For the full year 2013, the Company expects photovoltaic module shipments to
be in the range of approximately 1.6GW to 1.8GW, including modules used in our
total solutions business.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar,
remarked: "Clearly, our strategic decision to focus on the downstream total
solution business several years ago has proven to be the right one. This is
highlighted by our success at building scale in this business in low risk
countries such as Canada, Japan and the U.S. Our total solutions business
capability and project pipeline, supported by our low cost manufacturing
capability, position us well for the next phase of growth in the solar power
industry. Our focus for 2013 is on returning to profitability on a full year
basis."

Recent Developments

On February 27, 2013, the Company announced an 85 kW sales agreement with Zara
Solar, a Tanzanian company specialized in solar PV importing, retail and
installations. Including this new order, Canadian Solar will have supplied
more than 350 kW of its solar modules to Zara Solar for off-grid PV projects
in Tanzania.

On February 25, 2013, the Company announced that it has invested in and
partnered with Strata Solar on a suite of utility-scale solar power projects
located in North Carolina. The projects, developed jointly, will total
approximately 85MW divided amongst 15 unique solar installations.

On January 31, 2013 the Company announced that Credit Suisse will provide up
to $40 million, one year tenor loan. The loan will be used to finance Canadian
Solar's previously announced acquisition of 4 solar projects in Ontario,
Canada.

On January 22, 2013 the Company announced the launch of its next generation
ResidentialAC system. Canadian Solar's ResidentialAC system combines the
Company's highly efficient 250W PV module with a state of the art next
generation Micro Inverter to provide solar system installers, investors and
homeowners with a breakthrough solution that delivers high quality and
cost-effective performance. Canadian Solar's ResidentialAC system was designed
from the ground up and is anticipated to address all of the critical
limitations of current, first generation AC micro inverters in the market.

On January 14, 2013, the Company announced that its subsidiary, Canadian Solar
Solutions Inc., signed a 10 MW AC Module Supply Agreement with Algonquin Power
Co. ("APCo"), to provide Canadian Solar modules for a utility-scale solar
power project in Cornwall, Ontario. Construction is scheduled to begin in the
second quarter of 2013, with the project expected to be fully operational by
the fourth quarter of 2013.

On January 8, 2013, the Company announced that its 148 MW solar park PV
project in southern Brandenburg, Germany was named the 2012 winner of the
Solar Project of the Year Award by POWER-GEN International.

On December 28, 2012, Canadian Solar and SunEdison announced a purchase and
sale transaction wherein Canadian Solar's direct subsidiary, Canadian Solar
Solutions Inc., has acquired a majority interest in two utility-scale solar
power projects in Ontario with a total capacity of approximately 24 MW DC.
Subject to certain contractual conditions, Canadian Solar has the ability to
complete the purchase of two additional utility-scale solar power projects in
Ontario with a total capacity of approximately 22.5 MW DC, and an option to
purchase another solar project at a later date from SunEdison.

On December 13, 2012, the Company announced the appointment of Mr. Guangchun
Zhang as Chief Operating Officer. Reporting directly to Canadian Solar's
Chairman and Chief Executive Officer, Dr. Shawn Qu, Mr. Zhang will oversee all
aspects of the Company's production operations, including manufacturing,
quality control, research and development, as well as environmental and safety
management.

On December 3, 2012, the Company announced that it signed a financing
agreement pursuant to which Deutsche Bank has agreed to provide C$139 million
(US$139 million) in non-recourse, short-term construction financing to
Canadian Solar for the construction of solar power projects in Ontario,
Canada. The loans are expected to be repaid with the proceeds of the sale of
the respective financed projects.

Conference Call Details

The Company will hold a conference call on Monday, March 11, 2013 at 8:00 a.m.
U.S. Eastern Time (8:00 p.m., March 11, 2013 in Hong Kong) to discuss the
Company's financial results.

The dial-in phone number for the live conference call is +1-617-786-2962 or
+1-800-901-5213, with passcode 36230385. A live webcast will also be available
on Canadian Solar's website at www.canadiansolar.com.

A replay of the call will be available approximately two hours after the
conclusion of the live call through 10:00 a.m. on March 18, 2013, U.S. Eastern
Standard Time (10:00 p.m., March 18, 2013 in Hong Kong) by telephone at
+1-617-801-6888, with passcode 53358770. A webcast replay will also be
available at www.canadiansolar.com.

About Canadian Solar Inc. (NASDAQ: CSIQ)

Canadian Solar Inc. (NASDAQ: CSIQ) is one of the world's largest solar
companies. As a leading vertically integrated provider of ingots, wafers,
solar cells, solar modules and other solar applications, Canadian Solar
designs, manufactures and delivers solar products and solar system solutions
for on-grid and off-grid use to customers worldwide. With operations in North
America, Europe, Australia and Asia, Canadian Solar provides premium quality,
cost-effective and environmentally-friendly solar solutions to support global,
sustainable development. For more information, please visit
www.canadiansolar.com.

Safe Harbor/Forward-Looking Statements:

Certain statements in this press release including but not limited to
statements regarding our expected future shipment volumes, gross margins,
supply cost, manufacturing capacities, future market share, business prospects
and future quarterly or annual results, particularly the management quotations
and the statements in the "Business Outlook" section, are forward-looking
statements that involve a number of risks and uncertainties that could cause
actual results to differ materially. These statements are made under the "Safe
Harbor" provisions of the U.S. Private Securities Litigation Reform Act of
1995. In some cases, you can identify forward-looking statements by such terms
as "believes," "expects," "anticipates," "intends," "estimates," the negative
of these terms, or other comparable terminology. Factors that could cause
actual results to differ include the risks regarding the previously disclosed
SEC investigation as well as general business and economic conditions and the
state of the solar industry; governmental support for the deployment of solar
power; future available supplies of high-purity silicon; demand for end-use
products by consumers and inventory levels of such products in the supply
chain; changes in demand from significant customers; changes in demand from
major markets such as Germany; changes in customer order patterns; changes in
product mix; capacity utilization; level of competition; pricing pressure and
declines in average selling prices; delays in new product introduction; delays
in utility-scale project approval process; delays in utility-scale project
construction; continued success in technological innovations and delivery of
products with the features customers demand; shortage in supply of materials
or capacity requirements; availability of financing; exchange rate
fluctuations; litigation and other risks as described in the Company's SEC
filings, including its annual report on Form 20-F filed on April 27, 2012.
Although the Company believes that the expectations reflected in the forward
looking statements are reasonable, it cannot guarantee future results, level
of activity, performance, or achievements. You should not place undue reliance
on these forward-looking statements. All information provided in this press
release is as of today's date, unless otherwise stated, and Canadian Solar
undertakes no duty to update such information, except as required under
applicable law.



Canadian Solar Inc.
Unaudited Condensed Consolidated Statement of Operations
(In Thousands of US Dollars, Except Share And Per Share Data And Unless Otherwise Stated)
                                                                      Three Months Ended                      Twelve Months Ended
Item                                                                  December31, September30, December31,  December31, December31,
                                                                      2012         2012          2011          2012         2011
Net revenues                                                          294,839      325,965       474,060       1,294,829    1,898,922
Cost of revenues                                                      279,969      318,696       432,675       1,204,468    1,716,640
Gross profit                                                          14,870       7,269         41,385        90,361       182,282
Selling expenses                                                      24,965       21,372        21,094        91,053       69,341
General and administrative expenses                                   78,260       17,015        36,794        128,826      86,269
Research and development expenses                                     3,128        3,380         5,012         12,998       19,839
Total operating expenses                                              106,353      41,767        62,900        232,877      175,449
Income (loss) from operations                                         (91,483)     (34,498)      (21,515)      (142,516)    6,833
Interest expenses                                                     (9,894)      (15,232)      (11,737)      (53,305)     (43,844)
Interest income                                                       3,661        3,552         1,763         13,360       8,447
Gain (loss) on change in foreign currency derivatives                 2,267        (5,328)       2,407         (4,369)      (5,751)
Foreign exchange gain (loss)                                          (10,799)     7,041         (14,097)      (10,708)     (40,007)
Investment loss                                                       (1,082)      -             -             (1,082)      -
Loss before incomes taxes                                             (107,330)    (44,465)      (43,179)      (198,620)    (74,322)
Income tax benefit (expenses)                                         3,291        1,796         (16,269)      5,433        (16,540)
Equity in loss of unconsolidated investees                            (826)        (684)         (134)         (1,969)      (41)
Net                                                                   (104,865)    (43,353)      (59,582)      (195,156)    (90,903)
loss
Less: net income (loss) attributable to non-controlling interest      120          315           306           313          (99)
Net loss attributable to Canadian Solar Inc.                          (104,985)    (43,668)      (59,888)      (195,469)    (90,804)
Loss per share-basic                                                  ($2.43)      ($1.01)       ($1.39)       ($4.53)      ($2.11)
Shares used in computation-basic                                      43,236,769   43,209,194    43,155,767    43,190,778   43,076,489
Loss per share-diluted                                                ($2.43)      ($1.01)       ($1.39)       ($4.53)      ($2.11)
Shares used in computation-diluted                                    43,236,769   43,209,194    43,155,767    43,190,778   43,076,489



Canadian Solar Inc.
Unaudited Condensed Consolidated Statement of Comprehensive Income
(In Thousands of US Dollars)
                Three Months Ended                     Twelve Months Ended
                December31, September30, December31, December31, December31,
                2012         2012          2011         2012         2011
Net loss        (104,865)    (43,353)      (59,582)     (195,156)    (90,903)
Other
comprehensive
income, net of
tax:
Foreign
currency        2,584        2,785         7,690        5,240        17,094
translation
adjustments
Comprehensive   (102,281)    (40,568)      (51,892)     (189,916)    (73,809)
loss
Less:
comprehensive
income          168          485           382          720          387
attributable to
non-controlling
interest
Comprehensive
loss
attributable to (102,449)    (41,053)      (52,274)     (190,636)    (74,196)
Canadian Solar
Inc.



Canadian Solar Inc.
Unaudited Condensed Consolidated Balance Sheet
(In Thousands of US Dollars)
                                           December31,2012 December31,2011
Assets
Current assets
Cash and cash equivalents                       141,968           343,995
Restricted cash                                 422,357           178,270
Accounts receivable trade, net                  254,906           292,176
Accounts receivable, unbilled                   5,230             51,371
Amount due from related parties                 9,977             19,836
Inventories                                     274,456           296,568
Value added tax recoverable                     14,483            16,974
Advances to suppliers, net                      28,998            11,309
Foreign currency derivative assets              1,351             2,727
Project assets-current                          180,437           37,133
Prepaid expenses and other current assets       108,041           45,219
Total current assets                            1,442,204         1,295,578
Property, plant and equipment, net              469,643           510,069
Deferred tax assets                             39,082            23,227
Prepaid land use right                          18,629            13,805
Investments in affiliates                       26,728            11,008
Intangible assets, net                          4,328             8,516
Goodwill                                        -                 2,265
Project assets-non-current                      218,710           -
Other non-current assets                        39,989            15,341
TOTAL ASSETS                                    2,259,313         1,879,809
Current liabilities:
Short-term borrowings                           858,927           743,687
Accounts and notes payable                      461,631           305,998
Amounts due to related parties                  5,037             3,008
Other payables                                  104,783           84,676
Advances from customers                         18,659            65,216
Foreign currency derivative liabilities         365               -
Other current liabilities                       90,848            33,862
Total current liabilities                       1,540,250         1,236,447
Accrued warranty costs                          58,334            47,021
Convertible notes                               -                 950
Long-term borrowings                            214,563           88,249
Liability for uncertain tax positions           14,804            12,301
Deferred tax liabilities-non-current            56,152            -
Loss contingency accruals                       28,461            27,863
Total liabilities                               1,912,564         1,412,831
Mezzanine equity                                45,166            -
Common shares                                   502,562           502,403
Additional paid-in capital                      (38,296)          (53,331)
Accumulated deficit                             (224,162)         (28,693)
Accumulated other comprehensive income          50,795            45,555
Total Canadian Solar Inc. shareholders'         290,899           465,934
equity
Non-controlling interest                        10,684            1,044
Total equity                                    301,583           466,978
TOTAL LIABILITIES, MEZZANINE EQUTIY AND         2,259,313         1,879,809
SHAREHOLDERS' EQUITY

About Non-GAAP Financial Measures

To supplement its financial disclosures presented in accordance with GAAP,
Canadian Solar uses non-GAAP measures which are adjusted from the most
directly comparable GAAP results for certain items, as described below. The
Company presents the non-GAAP adjusted operating cash flow because it believes
it is important for the readers of the press release to know what the
Company's adjusted operating cash flow was before the impact of the
acquisition of solar power projects (two solar power projects from SunEdson in
Q4 2012 and16 projects in Ontario from former SkyPower Limited in Q2 2012). In
addition, the Company presents non-GAAPadjustednet loss and adjusted diluted
loss per share so that readers of the press release can better understand the
underlying operating performance of the business before the impact of the
provision for the arbitration decision and the bad debt allowance for doubtful
accounts in the fourth quarter of 2012. The non-GAAP adjusted operating cash
flow and adjusted net loss are not a measure of financial performance under
U.S. GAAP, and should not be considered in isolation or as an alternative to
operating cash flows and other measures determined in accordance with GAAP.

Reconciliation of GAAP measures to Non-GAAP measures
Statement of Cash Flows Data:
(In Thousands of US Dollars)
              Three Months Ended                         Twelve Months Ended
              December31,  September30,  December31,  December31,  December31,
              2012          2012           2011          2012          2011
GAAP
operating     (36,330)      (57,589)       48,937        (147,730)     60,124
cash inflow
(outflow)
Subtract
consideration 23,331        68,553         -             162,276       -
paid for
acquisition
Non-GAAP
adjusted
operating     (12,999)      10,964         48,937        14,546        60,124
cash inflow
(outflow)



Statement of Operations Data:
(In Thousands of US Dollars)
              Three Months Ended                         Twelve Months Ended
              December31,  September30,  December31,  December31,  December31,
              2012          2012           2011          2012          2011
GAAP net loss
attributable  (104,985)     (43,668)       (59,888)      (195,469)     (90,804)
to Canadian
Solar Inc.
Non-GAAP loss
adjustment
items:
Bad debt      31,239        569            18,537        34,191        18,537
allowances
Loss accruals
for an
arbitration   30,054        -              -             30,054        -
in favor of
LDK
Non-GAAP net
loss
attributable  (43,692)      (43,099)       (41,351)      (131,224)     (72,267)
to Canadian
Solar Inc.
GAAP loss per (2.43)        (1.01)         (1.39)        (4.53)        (2.11)
share-diluted
Non-GAAP loss
per           (1.01)        (1.00)         (0.96)        (3.04)        (1.68)
share-diluted

SOURCE Canadian Solar Inc.

Website: http://www.canadiansolar.com
Contact: Canadian Solar Inc., Ed Job, CFA, Director, Investor Relations,
ir@canadiansolar.com or Global IR Partners, David Pasquale, +1-914-337-8801,
csiq@globalirpartners.com
 
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