BALANCE SHEET COMPONENTS



	As of
(In thousands)	March 31, 2013			December 30, 2012
Accounts receivable, net:
Accounts receivable, gross (1)	$	338,147		$	429,977
Less: allowance for doubtful accounts	(31,009		)	(26,773		)
Less: allowance for sales returns	(4,129		)	(5,054		)
	$	303,009		$	398,150


(1)	Includes short-term finance receivables associated with solar power systems leased of $4.5 million as of both March 31, 2013 and December 30, 2012, respectively.



Inventories:
Raw materials	$	88,179	$	89,331
Work-in-process	55,668		50,627
Finished goods	137,520		151,428
	$	281,367	$	291,386



	As of
(In thousands)	March 31, 2013		December 30, 2012
Prepaid expenses and other current assets:
VAT receivables, current portion	$	102,592	$	97,041
Foreign currency derivatives	7,652		1,275
Deferred project costs	135,695		305,980
Deferred costs for solar power systems to be leased	24,148		31,419
Other receivables (2)	63,795		104,640
Other prepaid expenses	40,076		25,230
Other current assets	58,379		47,468
	$	432,337	$	613,053


(2)	Includes tolling agreements with suppliers in which the Company provides polysilicon required for silicon ingot manufacturing and procures the manufactured silicon ingots from the suppliers (see Notes 7 and 8).



Project assets - plants and land:
Project assets — plants	$	80,645	$	61,862
Project assets — land	18,148		21,645
	$	98,793	$	83,507
Project assets - plants and land, current portion	$	90,429	$	75,911
Project assets - plants and land, net of current portion	$	8,364	$	7,596



Property, plant and equipment, net:
Land and buildings	$	20,109		$	20,109
Leasehold improvements	226,987			221,378
Manufacturing equipment (3)	545,970			531,289
Computer equipment	75,557			75,438
Furniture and fixtures	8,274			8,178
Solar power systems (4)	34,621			12,501
Solar power systems leased	212,572			163,003
Solar power systems to be leased	65,290			89,423
Construction-in-process	17,719			34,110
	1,207,099			1,155,429
Less: accumulated depreciation (5)	(400,956		)	(380,520		)
	$	806,143		$	774,909

(3)

The Company's mortgage loan agreement with International Finance Corporation ("IFC") is collateralized by certain manufacturing equipment with a net book value of $168.1 million and $152.9 million as of March 31, 2013 and December 30, 2012, respectively. The Company also provided security for advance payments received from a third party in the form of collateralized manufacturing equipment with a net book value of $19.1 million and $16.5 million as of March 31, 2013 and December 30, 2012, respectively.


(4)	Includes $20.1 million of solar power systems associated with sale-leaseback transactions under the financing method (see Note 7).


(5)	Total depreciation expense was $23.6 million and $29.1 million for the three months ended March 31, 2013 and April 1, 2012, respectively.



	As of
(In thousands)	March 31, 2013		December 30, 2012
Property, plant and equipment, net by geography (6):
Philippines	$	359,171	$	367,708
United States	385,687		343,710
Mexico	32,158		32,409
Europe	28,411		29,292
Other	716		1,790
	$	806,143	$	774,909


(6)	Property, plant and equipment, net are based on the physical location of the assets.

The below table presents the cash and non-cash interest expense capitalized to property, plant and equipment and project assets during the three months ended March 31, 2013 and April 1, 2012, respectively.



	Three Months Ended
(In thousands)	March 31, 2013			April 1, 2012
Interest expense:
Interest cost incurred	$	(27,544	)	$	(19,631	)
Cash interest cost capitalized - property, plant and equipment	228			288
Non-cash interest cost capitalized - property, plant and equipment	57			133
Cash interest cost capitalized - project assets - plant and land	123			278
Non-cash interest cost capitalized - project assets - plant and land	102			231
Interest expense	$	(27,034	)	$	(18,701	)



	As of
(In thousands)	March 31, 2013		December 30, 2012
Other long-term assets:
Equity method investments	$	111,184	$	111,516
Bond hedge derivative	13,946		2,327
Cost method investments	10,240		14,918
Long-term financing receivables	93,540		67,742
Long-term debt issuance costs	29,870		38,185
Other	43,109		41,375
	$	301,889	$	276,063



	As of
(In thousands)	March 31, 2013		December 30, 2012
Accrued liabilities:
VAT payables	$	6,447	$	2,049
Foreign currency derivatives	6,346		4,891
Short-term warranty reserves	9,254		9,054
Interest payable	8,926		9,672
Deferred revenue	37,197		32,507
Employee compensation and employee benefits	42,491		40,750
Restructuring reserve	21,723		29,477
Short-term residential lease financing	26,581		25,153
Short-term sale-leaseback financing (Note 7)	6,423		—
Other	116,299		93,819
	$	281,687	$	247,372



Other long-term liabilities:
Embedded conversion option derivatives	$	13,946	$	2,327
Long-term warranty reserves	110,295		107,803
Deferred revenue	147,665		128,936
Unrecognized tax benefits	35,551		35,022
Long-term residential lease financing	17,364		11,411
Long-term sale-leaseback financing (Note 7)	27,427		—
Other	59,109		50,120
	$	411,357	$	335,619



Accumulated other comprehensive loss:
Cumulative translation adjustment	$	(3,662	)	$	(2,319	)
Net unrealized gain on derivatives	2,592			(243		)
Deferred taxes	(492		)	41
	$	(1,562	)	$	(2,521	)

Solar Power Systems Leased and to be Leased

The Company leases solar systems to residential customers under both operating and sales-type leases. As of March 31, 2013 and December 30, 2012, solar power systems leased out under operating leases, presented in "Property, plant and equipment, net" in the Company's Condensed Consolidated Balance Sheets was $212.6 million and $163.0 million, respectively, and solar power systems to be leased under operating leases, presented in "Property, plant and equipment, net" in the Company's Condensed Consolidated Balance Sheets was $65.3 million and $89.4 million, respectively. As of March 31, 2013, financing receivables for sales-type leases, presented in "Accounts receivable, net" and "Other long-term assets" in the Company's Condensed Consolidated Balance Sheets was $4.5 million and $93.5 million, respectively. As of December 30, 2012, financing receivables for sales-type leases, presented in "Accounts receivable, net" and "Other long-term assets" in the Company's Condensed Consolidated Balance Sheets was $4.5 million and $67.7 million, respectively. Amounts recognized in the Company's Condensed Consolidated Statement of Operations are not significant in any period presented.

The Company has entered into multiple facilities under which solar power systems are financed with third-party investors. Under the terms of certain programs the investors make upfront payments to the Company, which the Company recognizes as a non-recourse liability that will be reduced over the specified term of the program as customer receivables and government incentives are received by the third party investors. As the non-recourse liability is reduced over time, the Company makes a corresponding reduction in customer and government incentive receivables on its balance sheet. Under this approach, for both operating and sales-type leases the Company continues to account for these arrangements with its residential lease customers in the condensed consolidated financial statements.

As of March 31, 2013 and December 30, 2012, the remaining liability to the third-party investors, presented in Accrued liabilities and Other long-term liabilities on the Company's Condensed Consolidated Balance Sheets, was $43.9 million and $36.6 million, respectively. As of March 31, 2013 and December 30, 2012, the Company has pledged solar assets with an aggregate book value of $327.1 million and $280.8 million, respectively, to the third-party investors as security for its obligations under the contractual arrangements.

In the first quarter of fiscal 2013, the Company entered into a facility with a third-party investor under which both parties will invest in an entity which holds SunPower solar power systems and leases with residential customers. The Company was determined to hold a controlling interest in the less than wholly owned entity and has fully consolidated this entity as a result. The Company accounts for the portion of net assets in this consolidated entity attributable to the investor as Noncontrolling interest in its condensed consolidated financial statements (see Note 1).