TRANSFER OF ENTITIES UNDER COMMON CONTROL

Tenesol

On January 31, 2012, the Company completed its acquisition of Tenesol, a global solar provider headquartered in La Tour de Salvagny, France, and formerly wholly-owned subsidiary of Total for $165.4 million in cash in exchange for 100% of the equity of Tenesol from Total pursuant to a stock purchase agreement entered into on December 23, 2011. Tenesol is engaged in the business of devising, designing, manufacturing, installing, and managing solar power production and consumption systems for farms, industrial and service sector buildings, solar power plants and private homes.

As Tenesol and the Company were under the common control of Total as of the January 30, 2012 acquisition date, the acquisition is treated as a transfer of an entity under common control and represents a change in the reporting entity. As a result, the Company has retrospectively adjusted its historical financial statements to reflect the transfer beginning on October 10, 2011, the first date in which Total had common control of both the Company and Tenesol, and to include the results of operations in the Company's Condensed Consolidated Statement of Operations since October 10, 2011. The Company recorded the transfer of Tenesol's assets and liabilities at their historical carrying value in accordance with U.S. GAAP, and the net assets transferred were recorded as an equity contribution from Total to the Company as of October 10, 2011. The subsequent cash payment on January 31, 2012 as described above was treated as a cash distribution to Total. In addition, a transaction between Total and Tenesol on January 23, 2012 resulted in an additional equity contribution from Total to the Company in the fiscal quarter ending January 1, 2012, and an additional cash distribution to Total totaling $12.9 million in the fiscal quarter ending April 1, 2012.

The Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations as of and for the twelve months ended January 1, 2012 as reported previously and as adjusted in this report are as follows:



	As of
	January 1, 2012
	As Adjusted for the Change in Reporting Entity			As Previously Reported in the 2011 Annual Report on Form 10-K
Assets
Current assets:
Cash and cash equivalents	$	725,618		$	657,934
Restricted cash and cash equivalents, current portion	52,279			52,279
Accounts receivable, net	438,633			390,262
Costs and estimated earnings in excess of billings	54,854			54,854
Inventories	445,501			397,262
Advances to suppliers, current portion	43,143			43,143
Project assets - plants and land, current portion	24,243			24,243
Prepaid expenses and other current assets	502,879			482,691
Total current assets	2,287,150			2,102,668

Restricted cash and cash equivalents, net of current portion	27,276			27,276
Restricted long-term marketable securities	9,145			9,145
Property, plant and equipment, net	628,769			607,456
Project assets - plants and land, net of current portion	34,614			34,614
Goodwill	47,077			35,990
Other intangible assets, net	23,900			4,848
Advances to suppliers, net of current portion	284,378			278,996
Other long-term assets	176,821			174,204
Total assets	$	3,519,130		$	3,275,197

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	441,655		$	416,615
Accrued liabilities	249,404			234,688
Billings in excess of costs and estimated earnings	170,828			170,828
Short-term debt	2,122			—
Convertible debt, current portion	196,710			196,710
Customer advances, current portion	48,073			46,139
Total current liabilities	1,108,792			1,064,980

Long-term debt	364,273			355,000
Convertible debt, net of current portion	423,268			423,268
Customer advances, net of current portion	181,946			181,947
Other long-term liabilities	166,126			152,492
Total liabilities	2,244,405			2,177,687
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued and outstanding as of January 1, 2012	—			—
Common stock, $0.001 par value, 367,500,000 shares authorized; 101,851,290 shares issued, and 100,475,533 shares outstanding as of January 1, 2012	100			100
Additional paid-in capital	1,845,964			1,657,474
Accumulated deficit	(550,064		)	(540,187		)
Accumulated other comprehensive income	7,142			8,540
Treasury stock, at cost; 1,375,757 shares of common stock as of January 1, 2012	(28,417		)	(28,417		)
Total stockholders' equity	1,274,725			1,097,510
Total liabilities and stockholders' equity	$	3,519,130		$	3,275,197



	Year Ended
	January 1, 2012
	As Adjusted for the Change in Reporting Entity			As Previously Reported in the 2011 Annual Report on Form 10-K

Revenue	$	2,374,376		$	2,312,494
Cost of revenue	2,148,157			2,084,290
Gross margin	226,219			228,204
Operating expenses:
Research and development	57,775			57,775
Sales, general and administrative	331,380			319,719
Goodwill impairment	309,457			309,457
Other intangible asset impairment	40,301			40,301
Restructuring charges	21,403			21,403
Total operating expenses	760,316			748,655
Operating loss	(534,098		)	(520,451		)
Other expense, net:
Interest income	2,337			2,054
Interest expense	(67,253		)	(67,022		)
Gain on change in equity interest in unconsolidated investee	322			322
Gain on sale of equity interest in unconsolidated investee	5,937			5,937
Gain on mark-to-market derivatives	343			343
Other, net	(10,120		)	(8,946		)
Other expense, net	(68,434		)	(67,312		)
Loss before income taxes and equity in earnings of unconsolidated investees	(602,532		)	(587,763		)
Provision for income taxes	(17,208		)	(22,099		)
Equity in losses of unconsolidated investees	6,003			6,003
Net loss	$	(613,737	)	$	(603,859	)

Net loss per share of common stock:
Basic and diluted	$	(6.28	)	$	(6.18	)
Weighted-average shares:
Basic and diluted	97,724			97,724