Canadian Solar Reports Fourth Quarter and Full Year 2019 Results

GUELPH,Ontario,March 26,2020 -- 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 full year ended December 31,2019.

Fourth Quarter 2019 Highlights

Total module shipments were 2.5 GW,compared to 2.4 GW in the third quarter of 2019 and fourth quarter 2019 guidance of 2.3 GW to 2.4 GW.

Net revenue was $920 million,compared to $760 million in the third quarter of 2019 and fourth quarter 2019 guidance of $850 million to $880 million.

Gross profit was $230 million. Gross margin was 25.0%,compared to 26.2% in the third quarter of 2019 and fourth quarter 2019 guidance of 19% to 21%. Gross margin was 24.3% excluding the benefit of a U.S. anti-dumping ("AD") and countervailing duty ("CVD") true-up of $6.4 million.

Net income attributable to Canadian Solar was $67.7 million,or $1.12 per diluted share,compared to $58.3 million,or $0.96 per diluted share,in the third quarter of 2019.

Net cash provided by operating activities was approximately $247 million,compared to $22 million in the third quarter of 2019.

As of January 31,2020,the Company's portfolio of utility-scale solar power plants in operation was 880.2 MWp with an estimated total resale value of approximately $1 billion.

The Company's board of directors authorized a $150 million share repurchase program for a six month-period beginning December 9,2019.

Full Year 2019 Results

Total module shipments were 8.6 GW,compared to 6.6 GW in 2018 and guidance of 8.4 GW to 8.5 GW.

Net revenue was $3.20 billion,compared to $3.74 billion in 2018 and guidance of $3.13 billion to $3.16 billion.

Net income attributable to Canadian Solar was $171.6 million,or $2.83 per diluted share,compared to $237.1 million,or $3.88 per diluted share in 2018.

Net cash provided by operating activities was approximately $600 million,compared to $216 million in 2018.

Fourth Quarter 2019 Results

Net revenue in the fourth quarter of 2019 was $920 million,compared to $760 million in the third quarter of 2019,and $901 million in the fourth quarter of 2018. The sequential increasewas due to higher shipments recognized in revenue,stable module average selling price ("ASP") and the ongoing monetization of solar power plants.

Total module shipments in the fourth quarter of 2019 were 2,474 MW,compared to 2,387 MW in the third quarter of 2019 and fourth quarter 2019 guidance of 2,300MWto 2,400 MW. This included 295MW forthe Company's utility-scale solar power projects.

Gross profit in the fourth quarter of 2019 was $230 million,compared to $199 million in the third quarter of 2019 and $271 million in the fourth quarter of 2018. The benefit of the AD/CVD true-up was $6.4million in the fourth quarter of 2019,$24 million in the third quarter of 2019 and $16 million in the fourth quarter of 2018. Gross margin in the fourth quarter of 2019 was 25.0%,compared to 26.2% in the third quarter of 2019,30.1% in the fourth quarter of 2018 and fourth quarter 2019 guidance of 19% to 21%. The improvement was due to a stable ASP and lower manufacturing costs.

Income from operations in the fourth quarter of 2019 was $111million,compared to $80million in the third quarter of 2019,and $137 million in the fourth quarter of 2018. Operating margin was 12.1%in the fourth quarter of 2019,compared to 10.5% in the third quarter of 2019 and 15.2% in the fourth quarter of 2018.

Non-cash depreciation and amortization charges in the fourth quarter of 2019 were $45million,compared to $37 million in the third quarter of 2019 and $32 million in the fourth quarter of 2018.

The Company uses derivative instruments to hedge its foreign exchange positions. In the fourth quarter of 2019,the Company recorded a $6.6million loss on the change in fair value of derivativesused in the Company's foreign exchange hedging program,partly offset by the foreign exchange gain of $4 million. The net effect of the currency moves and hedging was a $2.6million loss during the fourth quarter,compared to a $0.5 million gain in the third quarter of 2019 and a net zero effect in the fourth quarter of 2018.

Net income attributable to Canadian Solar on a GAAP basis in the fourth quarter of 2019 was $67.7million,or $1.12per diluted share,compared to net income of $58.3 million,or $0.96 per diluted share in the third quarter of 2019,and net income of $111.6 million,or $1.81 per diluted share,in the fourth quarter of 2018. Net income attributable to Canadian Solar on a non-GAAP basis in the fourth quarter of 2019 was $63million,or $1.04per diluted share. This excludes the benefit of the AD/CVD true-up during the quarter of $6.4 million,net of income tax effect. For a reconciliation of results under GAAP to non-GAAP results,see the accompanying table "About Non-GAAP Financial Measures".

Dr. Shawn Qu,Chairman and Chief Executive Officer,commented: "I am pleased with the strong 2019 results,as revenue and gross margin were both ahead of expectations. The strategic decisions we made in R&D and production capacity helped us achieve one of the industry's highest margins,as we build upon our strong brand and maintain pricing power. We continue to be an innovation leader,recently setting another world record in cell conversion efficiency of 23.81% for N-type,large-area,multi-crystalline silicon solar cells. This further extends our competitive advantage,as we deliver modules with mono-like efficiencies at an attractive ASP. Alongwith the rest of the world,we have been working hard to ensure the health and safety of our employees in the face of the COVID-19 pandemic. We believe Canadian Solar's proven 19-year track record and the robust,conservative nature of our long-term strategy will allow the Company to emerge stronger from the current period of uncertainty."

Yan Zhuang,Acting Chief Executive Officer,commented: "We achieved strong results in Q4 and the full year 2019. On the Module and Systems Solutions side,2019 module shipments grew by almost 30% year-over-year,while underlying gross margin increased by 480 basis points (excluding the benefit of the AD/CVD true-up),resulting in a highly profitable Q4. On the Energy side,we continue to grow and monetize our operating solar assets and pipeline,which currently stand at 880 MWp and 15.4 GWp,respectively. Strategically,we are evaluating ways to capture more value by retaining partial ownership in selected solar project assets we develop to create higher,more predictable and more profitable revenues,thereby creating additional value for the Company and its shareholders. Meanwhile,we have set up a global team focusing on system integration and energy storage,which will help to build the new technology DNA of the Company and lead the next wave of growth in this industry."

Dr. Huifeng Chang,Senior Vice President and Chief Financial Officer,added: "In Q4,we delivered $230 million of gross profit and $67.7 million of net income,both sequentially higher than the previous quarter driven by higher module sales,stable ASPs,lower costs and increased project sales. We generated $247 million of operating cash flow and increased our total cash position to $1.2 billion. We also reduced total debt to $1.95 billion,and lengthened its average maturity. Our liquidity is healthy and our balance sheet continues to improve. We are proactively taking contingency measures to preserve cash and minimize risk,should the macro situation deteriorate further. Likewise,our financial plan has the flexibility to quickly switch gears if the global economy recovers faster than expected. We plan to continue with our stock repurchase program to create extra value for shareholders as recent COVID-19-relatedpanic-selling has brought our equity valuation below book value."

Energy Business Segment

Operating Results

Energy Business Segment Financial Results –

(In Thousands of U.S. Dollars,Except Percentages and Unless Otherwise Stated)

Three Months Ended

Twelve Months Ended

Dec 31,

2019

Sep 30,

2019

Dec 31,

2018

Dec 31,

2018

Net revenues

215,370

97,550

336,214

719,445

1,575,594

Cost of revenues

182,424

77,589

243,923

635,716

1,302,779

Gross profit

32,946

19,961

92,291

83,729

272,815

Operating expenses

17,747

24,077

30,087

90,760

61,276

Income (loss) from

operations

15,199

(4,116)

62,204

(7,031)

211,539

Gross margin

15.3%

20.5%

27.5%

11.6%

17.3%

Operating margin

7.1%

-4.2%

18.5%

-1.0%

13.4%

Project Backlog and Pipeline

The Company's project backlog (formerly called its late-stage,utility-scale,solar project pipeline) totaled 3.7 GW,as of January 31,2020. The backlog includes projects that have passed their Cliff Risk Date and are expected to be built in the next one to four years. The Cliff Risk Date depends on the country where a project is located and is defined as the date on which the project passes the last of the high-risk development stages (usually receipt of all required environmental approvals,interconnection agreements,feed-in tariff ("FiT") arrangements and PPAs). All projects in the current backlog have secured or are reasonably assured to secure a PPA or FiT.

The Company's project pipeline (formerly called its early-to-mid-stage,solar project pipeline) totaled 11.7 GW as of January 31,2020.

Project Backlog and Pipeline by Region* (as of January 31,2020)

Region

Backlog

Pipeline

Total

North America

1,597

5,232

6,829

Latin America

1,087

3,246

4,333

EMEA

206

2,113

2,319

Asia Pacific

806

676

1,482

China

45

410

455

Total

3,741

11,677

15,418

Note: Backlog and pipeline table represents the gross MWp size of the projects,including minority interest.

More recently,in 2018,the Energy team at Recurrent,the Company's subsidiary in the US,secured two PPAs for a total of 150 MWac with 180 MWh of storage attached. These landmark PPA wins have allowed Recurrent to develop deep in-house expertise on everything related to energy storage,including permitting,interconnection,engineering and design,structuring of off-take agreements to meet customer's needs,as well as plant operation. As a result of Recurrent's early mover advantage in the promising solar plus storage space,the Energy Business has been selected and is in negotiation with multiple different off-take parties for additional energy storage projects totaling 705 MWac with 2,820 MWh of storage.

The table below sets forth the Company's storage project backlog and pipeline as of January 31,2020.

Backlog

Pipeline

Total

Storage (MWh)

320

2,500

2,820

Projects in Construction

In addition to its project backlog and pipeline,the Company has 512 MW of solar projects in construction.

Projects in Construction (as

of January 31,2020)

MWp

Expected COD

Latin America Portfolio

449

2020-21

Japan Portfolio

63

2020

Total

512

-

Note: Approximately 264 MWp from LatAm portfolio in Brazil sold at NTP

to Nebras,with milestone revenue recognition over 2019-2021.

Solar Power Plants in Operation

In addition to its backlog,pipeline and projects in construction,the Company's power plants in operation totaled 1,023 MWp.

Plants in Operation – MWp (as of January 31,2020)

North America

Latin America

EMEA

Asia Pacific

China

Total

216

100

18

230

459

1,023

Note: 880 MWp is owned by the Company and a minority interest of 143 MWp is owned by business

partners.

Energy Business Strategy Update

The Company's Energy business model has been to develop solar projects for sales and to selectively retain partial ownership of certain projects to capture long-term recurring cash flow and to leverage EPC,operations and management ("O&M"),asset management and other service business. Canadian Soar has one of the world's largest solar energy development platforms,with a track record of originating,developing,financing,building and bringing into commercial operation over 5.6 GWp of solar power plants across six continents. It currently employs 400 professionals to support its integrated business model. The Energy business team includes developers with expertise in developing both greenfield and brownfield projects,engineers who can design and manage the construction of solar power plants,energy experts that specialize in power marketing who focus on negotiating power purchase agreements ("PPAs") and hedging instruments,and experts in the O&M,as well as asset management of solar power plants. In addition,the Energy business has an in-house finance team with experience in a wide range of debt and equity instruments used to finance solar assets,including establishing private and public fund vehicles to optimize equity returns.

The Energy business has traditionally sold most of its project ownership at notice to proceed ("NTP") or commercial operation date ("COD"),depending on the best exit point for each particular project. The Company has also retained minority ownerships in certain projects to capture additional value. A successful example is the Canadian Solar Infrastructure Fund,which is sponsored by the Company and has been listed on Tokyo Stock Exchange since 2017. The Company is evaluating the expansion of these strategies into other markets as it helps to reduce lumpiness of revenue,profit and cash flow,while increasing the predictability and stability of its business and creating long-term value for shareholders.

Module and System Solutions (MSS) Business Segment

Operating Results

MSS Business Segment Summary Financial Results* - (In Thousands of U.S.

Dollars,Except Percentages and Unless Otherwise Stated)

Three Months Ended

Twelve Months Ended

Dec 31,2019

Sep 30,2019

Dec 31,2018

Dec 31,2018

Net revenues

765,696

674,921

629,716

2,582,635

2,413,889

Cost of revenues

551,517

493,505

472,229

1,934,062

1,923,131

Gross profit

214,179

181,416

157,487

648,573

490,758

Operating expenses

100,329

94,730

104,658

368,858

349,149

Income from operations

113,850

86,686

52,829

279,715

141,609

Gross margin

28.0%

26.9%

25.0%

25.1%

20.3%

Operating margin

14.9%

12.8%

8.4%

10.8%

5.9%

Note: *Included effects of both sales to third party customers and to the Company's Energy Segment.Please refer to the attached financial tables for the

intercompany transaction elimination information. Income from operation amounts reflect management's allocation and estimate as some services are shared

by the two segments of the Company.

The table below provides the geographic distribution of MSS business net revenue:

MSS Net Revenue Geographic Distribution* (In Millions of U.S. Dollars,Except Percentages)

The fourth

quarter of

2019

% of Net

Revenue

Full year

2019

% of Net

Revenue

Asia

239

34

891

36

Americas

320

45

836

34

Europe and others

145

21

754

30

Total

704

100

2,481

100

*Note: Values do not include sales from the MSS business

to the Energy business.

Canadian Solar shipped 2.5 GW of modules to more than 60 countries in the fourth quarter of 2019 and 8.6 GW to 90 countries for the full year 2019. The top five markets ranked by revenue were the U.S.,Brazil,China,Japan and Australia in the fourth quarter; and Brazil,the U.S.,Australia,Japan and China for the full yearof 2019.

Multi-crystalline modules accounted for 68% of the Company's module shipments in the fourth quarter and 74% for the full year of 2019,with mono-crystalline modules representing 32% and 26%,respectively. The Company's manufacturing capacity has the flexibility to produce both multi-crystalline and mono-crystalline modules,with the mix decision depending on the relative profitability and levelized cost of electricity ("LCOE") of the alternative products.

Manufacturing Capacity

The table below sets forth the Company's manufacturing capacity expansion plan from December 31,2019 to December 31,2020.

Manufacturing Capacity (MW)

31-Dec-2019

Actual

30-Jun-2020

Planned

31-Dec-2020

Planned

Ingot

1,850

1,850

2,350

Wafer

5,000

5,000

Cell

9,600

10,100

10,100

Module

13,040

14,850

16,050

The Company's manufacturing capacity expansion plan is subject to change based on market conditions.

Business Outlook

The Company's business outlook is based on management's current views and estimates given existing market conditions,order book,production capacity,anticipated timing of project sales,and the global economic environment. This outlook is subject to uncertainty with respect to,among other things,final customer demand and project construction and sale schedules,and in particular the impact of COVID-19. Management's views and estimates are subject to change without notice.

For the first quarter of 2020,the Company expects total module shipments to be in the range of 2.15 GW to 2.25 GW,including approximately 250MWof module shipments to the Company's own projects that may not immediately be recognized as revenue. Total revenue is expected to be in the range of $780million to $810million,with gross margin expected to be between 26% and 28%.

For the full year of 2020,the Company expects total module shipments to be in the range of approximately 10 GW to 12 GW,with total revenue expected to be in the range of $3.4 billion to $3.9 billion.

Yan Zhuang,commented: "We were experiencing strong demand across all regions until the past few days,as we started to see some delays and weakening demand. Our current guidance incorporates the estimated impact to the best of our knowledge today,but the situation is fluid and we are closely monitoring and analyzing market conditions. We have a globally diversified revenue base and tight control over the supply chain,which gives us significant flexibility and room to adjust to external changes. Our long-term outlook remains optimistic and we will continue to execute on our strategy and create value for the Company and its shareholders."

Recent Developments

On March 23,Canadian Solar announced the closing of a 17.7 MWp solar portfolio in Italy to Sonnedix.

On March 17,Canadian Solar announced it had secured a EUR55 million bilateral revolving credit facility with Intesa Sanpaolo to fund the construction of a 151 MWp portfolio of solar PV projects in Italy.

On March 12,Canadian Solar announced that it had signed a PPA with Amazon for its 146 MWp solar power project in Australia.

On March 9,Canadian Solar announced that it had signed a 15-year PPA contract with Techgen,S.A. de C.V. for a 103 MWp solar power project in Mexico.

On March 6,Canadian Solar announced that its technology team had set a world record of 23.81% conversion efficiency for n-type large area multi-crystalline silicon solar cell. The record-setting N-type P5 cell conversion efficiency was recently tested and certified byGermany'sInstitute fürSolarenergieforschung GmbH(ISFH)

On February 19,Canadian Solar announced that it had commenced construction of two solar power projects totaling 26.6 MWp in Japan.

On February 18,Canadian Solar announced that it had completed the sale of the 56.3 MWp Yamaguchi Shin Mine solar power plant in Japan for an enterprise value of approximately JPY22.3 billion (US$205 million).

On February 10,Canadian Solar announced that it had secured 225.2 million Brazilian reais (US$55 million) non-recourse project financing from Nordeste do Brasil S.A. for its 152.4 MWp Lavras solar power projects.

On February 6,Canadian Solar announced that it had acquired a 47.5 MWp portfolio of solar power projects in Chile. These projects will become operational in two different stages beginning in the fourth quarter of 2020.

On February 5,Canadian Solar announced that it had signed a multi-year module supply agreement with Lightsource BP to deliver 1.2 GW of high efficiency polycrystalline solar modules for projects in the US and Australia.

On January 6,Canadian Solar announced the appointment of Lauren C. Templeton as an independent director,and Karl E. Olsoni as a strategic advisor to its Board of Directors.

On December 23,2019,Canadian Solar announced that it had reached commercial operation on a 1.98 MWp solar power plant in Taiwan.

On December 9,Canadian Solar announced that its Board of Directors authorized a $150 million share repurchase program for a six-month period beginning December 9,2019 and ending June 8,2020.

On December 5,Canadian Solar announced that it had closed the sale of the 3.3 MWp Milborne solar power plant in the UK.

On December 2,Canadian Solar announced that it had completed the sale of a 10.8 MWp solar power plant in Japan to Canadian Solar Infrastructure Fund,Inc. for $42.1 million.

On November 20,Canadian Solar announced that it had reached commercial operation on a 53.4 MWp solar power project in Japan.

On November 18,Canadian Solar announced that its wholly owned subsidiary Recurrent Energy closed the sale of 99 percent of a partnership that owns the Class B membership interest in the 102 MWp NC 102 solar power projects inNorth Carolina,toNextEnergy Capital.

On November 14,Canadian Solar announced that it had sold a 49% interest in three solar power projects in Mexico totaling 370 MWp to Korea Electric Power Corporation (KEPCO) and Sprott Korea (Sprott). Under the agreement,KEPCO and Sprott will acquire the Company's remaining interest in the projects following COD.

Conference Call Information

The Company will hold a conference call at 8:00 a.m. U.S. Eastern Daylight Time on March 26,2020 (8:00 p.m.,2020 in Hong Kong) to discuss the Company's fourth quarter and full year 2019 results and business outlook. The dial-in phone number for the live audio call is +1 866-519-4004 (toll-free from the U.S.),+852-3018-6771 (local dial-in from HK) or +1 845-675-0437 (from international locations). The passcode for the call is 4068575. A live webcast of the conference call will also be available on the Investor Relations section of Canadian Solar's website at www.canadiansolar.com.

A replay of the call will be available twohours after the conclusion of the call until 8:00 a.m. U.S. Daylight Time on Friday,April 3,2020 in Hong Kong) and can be accessed by dialing +1-855-452-5696 (toll-free from the U.S.),+852-3051-2780 (local dial-in from HK) or +1-646-254-3697 (from international locations),with passcode 4068575. A webcast replay will also be available on the investor relations section of Canadian Solar's at www.canadiansolar.com.

AboutCanadian Solar Inc.

Canadian Solar was founded in 2001 in Canada and is one of the world's largest solar power companies. It is a leading manufacturer of solar photovoltaic modules and provider of solar energy solutions and has a geographically diversified pipeline of utility-scale solar power projects in various stages of development. Over the past 19 years,Canadian Solar has successfully delivered over 40 GW of premium-quality,solar photovoltaic modules to customers in over 150 countries. Canadian Solar is one of the most bankable companies in the solar industry,having been publicly listed on NASDAQ since 2006. For additional information about the Company,follow Canadian Solar on LinkedIn or visit www.canadiansolar.com.

Safe Harbor/Forward-Looking Statements

Certain statements in this press release regarding the Company's expected future shipment volumes,gross margins 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 general business and economic conditions and the state of the solar industry; volatility,uncertainty,delays and disruptions related to the COVID-19 pandemic; 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 Japan,India and China; 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; delays in the completion of project sales; 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 25,2019. 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. Investors 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.

FINANCIAL TABLES FOLLOW

The following tables provide unaudited select financial data for the Company's Module and System Solutions ("MSS") and Energy businesses:

Select Financial Data - Module and System Solutions,and

Energy

Three Months Ended December 31,2019

(In Thousands of U.S. Dollars,Except Percentages)

MSS

Energy

Elimination

Total

Net revenues

$765,696

$215,370

$(61,359)

$919,707

Cost of revenues

551,517

182,424

(43,736)

690,205

Gross profit

214,179

32,946

(17,623)

229,502

Gross margin

28.0%

15.3%

——

25.0%

Income (loss) from

operations

113,850

15,199

(17,623)

111,426

Twelve Months Ended December 31,Except Percentages)

MSS

Energy

Elimination

Total

Net revenues

$2,635

$719,445

$(101,497)

$3,200,583

Cost of revenues

1,062

635,716

(87,692)

2,482,086

Gross profit

648,573

83,729

(13,805)

718,497

Gross margin

25.1%

11.6%

——

22.4%

Income (loss) from

operations

279,715

(7,031)

(13,805)

258,879

Select Financial Data - Module and System

Solutions,and Energy

Three Months

Ended December

31,2019

Twelve Months

Ended December

31,2019

(In Thousands of U.S. Dollars)

MSS Revenues:

Solar modules and other solar power products

$619,988

$2,055,249

Solar system kits

31,430

116,449

EPC services

29,890

223,423

O&M services

5,963

19,405

Others (materials and components)

17,066

66,612

Subtotal

$704,337

$2,481,138

Energy Revenues:

Solar power projects

$193,970

$668,476

Electricity

1,801

5,866

Others (EPC and development services)

19,599

45,103

Subtotal

$215,370

$719,445

Total net revenues

$919,707

$3,583

Canadian Solar Inc.

Unaudited Condensed Consolidated Statements of Operations

(In Thousands of U.S. Dollars,Except Share and Per Share Data and Unless Otherwise Stated)

Three Months Ended

Twelve Months Ended

December

31,

September

30,

December

31,

2019

2019

2018

2019

2018

Net revenues

$ 919,707

$ 759,882

$ 901,041

$ 3,583

$ 3,744,512

Cost of revenues

690,205

560,968

629,732

2,086

2,969,430

Gross profit

229,502

198,914

271,309

718,497

775,082

Operating expenses:

Selling expenses

50,099

46,935

44,372

180,326

165,402

General and administrative

expenses

64,133

61,491

81,309

242,783

245,376

Research and development

expenses

10,179

11,567

15,417

47,045

44,193

Other operating income

(6,335)

(1,186)

(6,353)

(10,536)

(44,546)

Total operating expenses

118,076

118,807

134,745

459,618

410,425

Income from operations

111,426

80,107

136,564

258,879

364,657

Other income (expenses):

Interest expense

(19,734)

(19,240)

(23,003)

(81,326)

(106,032)

Interest income

2,979

2,579

2,180

12,039

11,207

Loss on change in fair value of

derivatives,net

(6,294)

(2,176)

(7,256)

(22,218)

(19,230)

Foreign exchange gain,net

3,717

2,825

7,328

10,370

6,529

Investment income (loss)

120

(738)

35,416

1,929

41,361

Other income (expenses),net

(19,212)

(16,750)

14,665

(79,206)

(66,165)

Income before income taxes and

equity in earnings(loss) of

unconsolidated investees

92,214

63,357

151,229

179,673

298,492

Income tax expense

(25,209)

(10,434)

(36,684)

(42,066)

(61,969)

Equity in earnings (loss) of

unconsolidated investees

923

2,303

(445)

28,948

5,908

Net income

67,928

55,226

114,100

166,555

242,431

Less: Net income (loss)

attributable to non-controlling

interests

191

(3,105)

2,516

(5,030)

5,361

Net income attributable to

Canadian Solar Inc.

$ 67,737

$ 58,331

$ 111,584

$ 171,585

$ 237,070

Earnings per share - basic

$ 1.13

$ 0.97

$ 1.89

$ 2.88

$ 4.02

Shares used in computation - basic

59,846,779

59,900,740

59,160,338

59,633,855

58,914,540

Earnings per share - diluted

$ 1.12

$ 0.96

$ 1.81

$ 2.83

$ 3.88

Shares used in computation - diluted

60,407,086

60,753

62,356,019

60,777,696

62,291,670

Canadian Solar Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

(In Thousands of U.S. Dollars)

Three Months Ended

Twelve Months Ended

December

31,

2019

2019

2018

2019

2018

Net Income

67,431

Other comprehensive income (net of

tax of nil):

Foreign currency translation adjustment

8,923

(13,419)

(38,399)

319

(50,577)

Loss on commodity hedge

——

——

(8,752)

——

(8,752)

Gain (loss) on changes in fair value of

derivatives

1,147

(1,314)

(3,416)

(5,847)

6,094

Comprehensive income

77,998

40,493

63,533

161,027

189,196

Less: comprehensive income (loss)

attributable to non-controlling interests

(2,216)

(3,529)

1,189

(11,100)

8,241

Comprehensive income attributable

to Canadian Solar Inc.

80,214

44,022

62,344

172,127

180,955

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheets

(In Thousands of U.S.Dollars)

December31,

December31,

2019

2018

ASSETS

Current assets:

Cash and cash equivalents

$ 668,770

$ 444,298

Restricted cash

526,723

480,976

Accounts receivable trade,net

436,815

498,231

Accounts receivable,unbilled

15,256

38

Amounts due from related parties

31,232

16,740

Inventories

554,070

262,022

Value added tax recoverable

108,920

107,222

Advances to suppliers

47,978

37,011

Derivative assets

5,547

4,761

Project assets

604,083

933,563

Prepaid expenses and other current

assets

253,542

289,459

Total current assets

3,252,936

3,074,321

Restricted cash

9,927

15,716

Property,plant and equipment,net

1,046,035

884,986

Solar power systems,net

52,957

54,898

Deferred tax assets,net

153,963

121,087

Advances to suppliers

40,897

48,908

Prepaid land use right

60,836

65,718

Investments in affiliates

152,828

126,095

Intangible assets,net

22,791

14,903

Goodwill

——

1,005

Derivatives assets

——

3,216

Project assets

483,051

352,200

Right-of-use assets*

37,733

——

Other non-current assets

153,253

129,605

TOTAL ASSETS

$ 5,467,207

$ 4,892,658

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheets (Continued)

(In Thousands of U.S.Dollars)

December31,

2019

2018

Current liabilities:

Short-term borrowings

$ 933,120

$ 1,027,927

Long-term borrowings on project assets -

current

286,173

265,770

Accounts payable

585,601

379,462

Notes payable

544,991

369,722

Amounts due to related parties

10,077

16,847

Other payables

446,454

408,013

Convertible notes

——

127,428

Advance from customers

134,806

39,024

Derivative liabilities

10,481

13,698

Operating lease liabilities*

18,767

——

Tax equity liabilities

——

158,496

Other current liabilities

121,527

141,970

Total current liabilities

3,091,997

2,948,357

Accrued warranty costs

55,878

50,605

Long-term borrowings

619,477

393,614

Amounts due to related parties

——

568

Derivatives liabilities

1,841

——

Liability for uncertain tax positions

15,353

20,128

Deferred tax liabilities

56,463

35,698

Loss contingency accruals

28,513

24,608

Operating lease liabilities*

20,718

——

Financing liabilities

76,575

77,835

Other non-current liabilities

75,334

68,400

Total LIABILITIES

4,042,149

3,619,813

Equity:

Common shares

703,806

702,931

Treasury stock

(11,845)

——

Additional paid-in capital

17,179

10,675

Retained earnings

793,601

622,016

Accumulated other comprehensive loss

(109,607)

(110,149)

Total Canadian Solar Inc. shareholders'

equity

1,393,134

1,225,473

Non-controlling interests in subsidiaries

31,924

47,372

TOTAL EQUITY

1,425,058

1,272,845

TOTAL LIABILITIES AND EQUITY

$ 5,658

Note: * The Company adopted ASU 2016-02 – Leases (Topic ASC842) in the first quarter of 2019 using the

optional transition method and elected certain practical expedients,which were permitted under the guidance

ASU 2018-11,Leases (Topic 842) – Targeted Improvements. The transition guidance allowed the Company not

to reassess prior conclusions related to contracts containing leases or lease classification. The adoption primarily

affected the condensed consolidated balance sheet through the recognition of right-of-use assets and lease

liabilities as of January 1,2019. The adoption did not have a significant impact on the results of operations or cash

flows.

About Non-GAAP Financial Measures

To supplement its financial disclosures presented in accordance with GAAP,the Company uses non-GAAP measures which are adjusted from the most comparable GAAP measures for certain items as described below. The Company presents non-GAAP net income and diluted earnings per share so that readers can better understand the underlying operating performance of the business before the impact of AD/CVD true-up provisions. The non-GAAP numbers are not measures of financial performance under U.S. GAAP,and should not be considered in isolation or as an alternative to other measures determined in accordance with GAAP. These non-GAAP measures may differ from non-GAAP measures used by other companies,and therefore their comparability may be limited.

Statement of Operations Data:

(In Thousands of U.S. Dollars,Except Share and Per

Share Data)

Three Months Ended

TwelveMonths Ended

December

31,

2019

September

30,

2019

December

31,

2018

December

31,

2019

December

31,

2018

GAAP net income attributable to Canadian

Solar Inc.

67,737

58,331

111,584

171,585

237,070

Non-GAAP income adjustment items:

AD/CVD provision true-up

(6,415)

(24,291)

(16,098)

(52,323)

(50,172)

Tax impact

1,592

6,029

3,995

12,987

12,452

Non-GAAP net income attributable to

Canadian Solar Inc.

62,914

40,069

99,481

132,249

199,350

GAAP income per share - diluted

$ 1.12

$ 0.96

$ 1.81

$ 2.83

$ 3.88

Non-GAAP income per share - diluted

$ 1.04

$ 0.66

$ 1.61

$ 2.19

$ 3.28

Shares used in computation - diluted

60,670

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