Sunedison (SUNEQ) 8-K Results of Operations and Financial Condition

Exhibit 99.1

MEMC Electronic Materials, Inc. 501 Pearl Drive (City of O’Fallon) Post Office Box 8 St. Peters, Missouri 63376 USA Phone: 636-474-5000 Fax: 636-474-5158 www.memc.com
	For Immediate Release
	MEMC ANNOUNCES FOURTH QUARTER & FULL YEAR RESULTS
	St. Peters, MO, January 26, 2006 – MEMC Electronic Materials, Inc. (NYSE: WFR) today reported preliminary financial results for the fourth quarter and year ended December 31, 2005.
	Summary of the 2005 fourth quarter results:
	•      Net sales of $317.3 million
	•      Gross Margin of 40.2%
	•      Cash of $153.6 million after debt pay-down of over $80 million
	Net sales of $317.3 million for the fourth quarter of 2005 represent an increase of 18.2% from the fourth quarter 2004 level of $268.4 million. Fourth quarter gross margin was $127.7 million, or 40.2% of sales. Operating expenses of $31.9 million declined as a percentage of sales to 10.0% from 11.0% of sales in the year-ago quarter. This resulted in operating income of $95.8 million, or 30.2% of sales, compared to $69.6 million, or 25.9% of sales, in the 2004 fourth quarter.
	The combination of income taxes and favorable tax adjustments provided a net benefit of $66.3 million, or $0.29 per share, for the full year 2005, and $23.5 million, or $0.10 per share, for the first nine months, as stated in the company’s Form 8-K filed November 15. As a result, the estimated tax benefit for the fourth quarter is estimated to be $42.8 million, or $0.19 per share, thereby resulting in total diluted earnings per share for the fourth quarter of $0.59. There are uncertainties, however, regarding the distribution of 2005 annual income taxes to the proper quarters. Upon completion of the company’s Form 10-Q’s for the first three quarters of 2005, there may be material adjustments to income tax amounts in some or all quarters which may change earnings per share for those individual quarters, but such adjustments are not expected to materially change the overall earnings per share for the full year.
	Approximately $12.5 million of the revenue increase and $12.5 million of the profit increase for the 2005 fourth quarter was due to the effect of the previously disclosed deferred revenue and profits related to polysilicon shipments in prior quarters. This brings the company’s deferred revenue balance down to less than $1 million, and the company does not expect any additional deferred revenue to be recorded in 2006 or going forward.

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On a non-GAAP basis, excluding the benefit of the $12.5 million of deferred revenue and profits, net sales would have been $304.8 million, gross margin 37.8% of sales and operating income 27.3% of sales.

Operating cash flow for the quarter was $109.1 million, or 34.4% of sales. Capital expenditures for the quarter totaled $21.2 million. Free cash flow (operating cash flow minus capital expenditures) was $87.9 million or 27.7% of sales. The company used this free cash to pay down over $80 million in debt during the quarter.

Commenting on the company’s performance, Nabeel Gareeb, MEMC’s Chief Executive Officer, said: “As expected, the stronger pricing environment has materialized and contributed to good incremental margins. Unit demand for the semiconductor and solar industries continued to show strong growth, and there are no short-term indications of a slow down. In addition, our profit generation enabled us to pay off a large amount of debt and have a significant net cash (cash less debt) position.”

2005 Results

For the year ended December 31, 2005, the company’s net sales increased by 9.4% to $1,124.7 million, compared to $1,028.0 million in 2004. Gross margin increased to $409.0 million, or 36.4% of net sales in 2005, compared to $369.4 million, or 35.9% of net sales in 2004. Operating income was $285.2 million, or 25.4% of sales, compared to $260.5 million, or 25.3% of sales in 2004.

The company reported net income of $338.2 million, or $1.49 per diluted share, for the year ended December 31, 2005, compared to net income of $226.2 million, or $1.02 per diluted share, in 2004. Additionally, MEMC generated operating cash flow of $303.4 million in 2005, or 27.0% of sales, and free cash flow of $144.3 million or 12.8% of sales. This enabled the company to reduce debt by over $100 million, including the benefit of currency changes. Capital expenditures in 2005 totaled $159.1 million, or 14.1% of net sales, compared to $149.8 million in 2004.

“We are pleased with the improvement in our results in 2005,” commented Gareeb. “We saw strong revenue growth, margin expansion, and even faster EPS growth, all in a year that had extremely soft demand dynamics in the first half.”

“Net sales and gross margin grew to record levels, and our full year incremental margin (the increase in 2005 gross margin dollars over 2004 gross margin dollars divided by the increase in 2005 net sales over 2004 net sales) was 41%. We finished the year with debt lower by over $100 million and net cash of $113.7 million.”

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“While we continued to build upon our financial success, we were keenly focused on improving our positioning in all aspects of the business in 2005. In the third quarter, we began 300mm production in Taiwan, reinforcing our global positioning and expanding our presence in this strategic and fast-growing region. We made investments to grow and enhance our polysilicon and Silicon-On-Insulator capabilities. We also took several steps to protect our intellectual property portfolio, particularly with respect to PerfectSilicon™, and the fast growing markets that it serves. As we begin the new year, we are as excited as ever about our prospects for the future, and expect that our hard work in 2005 will yield even better results in 2006 and beyond.”

“Finally, we are proud to have received third party recognition, including being added to the S&P MidCap 400 index, being named to BusinessWeek’s Info Tech Top 100 List, and more recently, to Forbes’s list of Best Big Companies.”

Outlook

“Based on the strength of the pricing environment and the indicated demand from our semiconductor and solar customers, we are targeting first quarter 2006 sales to be between $315 and $320 million, gross margin close to 40%, and operating expenses to be between $30 and $31 million. Compared to our non-GAAP results for the 2005 fourth quarter (reported results minus $12.5 million of deferred revenue and profits) of $304.8 million of sales and gross margin of 37.8%, this would represent a 3%-5% increase in revenue, and approximately 200 basis point increase in margin.”

“Assuming that this environment continues, and the anticipated solar market opportunities materialize as expected, we are targeting revenues to be between $1.3 billion and $1.5 billion, and non-GAAP EPS (based on a cash tax rate in the mid-teens) to be between $1.40 and $1.70 for the 2006 fiscal year,” continued Gareeb.

“Although MEMC has been quietly working on expanding its polysilicon capacity, we are now formally announcing that we are targeting our polysilicon capacity to grow from approximately 4,000 metric tons per year to approximately 8,000 metric tons per year over the next three years, as dictated by market conditions. The majority of this capacity will be usable for both semiconductor and solar wafer production and is anticipated to be accomplished within the constraints of our business model. This will provide us with significant opportunities to take advantage of a vertically integrated supply chain as compared to our competition, by providing security of supply for semiconductor wafer expansions and significantly increasing our penetration of the solar market. This polysilicon capacity expansion coupled with the opportunities available in the semiconductor and solar wafer industries would support an approximate doubling of our first quarter 2006 revenue run rate by the end of the decade, if market conditions allow,” concluded Gareeb.

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Other Events

MEMC intends to begin expensing employee stock options and other share-based compensation in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 effective in the first quarter of 2006.

The company currently estimates that the impact of adoption of SFAS No. 123R in 2005 would have been approximately $0.04 per diluted share, of which approximately $0.01 per diluted share would have been recorded in the fourth quarter. The company anticipates that the amount of expense for share-based compensation in 2006 will be comparable to the would-be expense for 2005.

The announced preliminary results are subject to audit by the company’s independent registered public accountants before filing on Form 10-K. The company previously reported preliminary results for the 2005 third quarter and preliminary restated results for the 2005 first and second quarters on a Form 8-K filed November 15, 2005. The company is continuing its work to finalize its restated Form 10-Qs for the first two quarters of 2005 and its third quarter Form 10-Q which must be completed before the filing of the Form 10-K.

Conference Call

MEMC will host a conference call today, January 26, 2006, at 5:30 p.m. ET to discuss the company’s preliminary fourth quarter results and related business matters. A live webcast will be available on the company’s web site atwww.memc.com. Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.

A replay of the conference call will be available from 7:30 p.m. ET on January 26, 2006, until 11:59 p.m. ET on February 2, 2006. To access the replay, please dial (402) 220-4329 at any time during that period. A replay will also be available until 11:59 pm ET on February 5, 2006 on the company’s web site atwww.memc.com.

About MEMC

MEMC is the world’s largest public company solely devoted to the supply of wafers to semiconductor device manufacturers. MEMC has been a pioneer in the design and development of wafer technologies over the past four decades. With R&D and manufacturing facilities in the U.S., Europe and Asia, MEMC enables the next generation of high performance semiconductor devices.

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CONTACT:

Bill Michalek

Director, Investor Relations

MEMC Electronic Materials, Inc.

(636) 474-5443

Certain matters discussed in this news release are forward-looking statements, including our expectation that the company will not have any additional deferred revenue recorded in 2006 or going forward; that first quarter 2006 sales will be between $315-$320 million, gross margin close to 40%, and operating expenses will be between $30-$31 million; that revenues are targeted to be between $1.3 billion and $1.5 billion and non-GAAP EPS is targeted to be between $1.40 and $1.70 for the 2006 fiscal year (based on a cash tax rate in the mid-teens); that our polysilicon capacity will grow to approximately 8,000 metric tons per year over the next three years; that this capacity expansion coupled with the opportunities available in the semiconductor and solar wafer industries would support an approximate doubling of our first quarter 2006 revenue run-rate by the end of the decade; and the company’s estimate of the impact of the adoption SFAS No. 123R in 2005 and 2006. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include market demand for wafers and semiconductors as well as polysilicon; customer acceptance of our new products; utilization of manufacturing capacity; our ability to reduce manufacturing and operating costs; inventory levels of our customers; changes in the pricing environment; assumptions underlying management’s financial estimates; general economic conditions; actions by competitors, customers and suppliers; the impact of competitive products and technologies; changes in currency exchange rates and other risks described in the company’s filings with the Securities and Exchange Commission, including the company’s 2004 Form 10-K. These forward-looking statements represent the company’s judgment as of the date of this release. The company disclaims, however, any intent or obligation to update these forward-looking statements.

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MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; Dollars in thousands, except share data)

	Three Months Ended									Twelve Months Ended
	December 31, 2005			September 30, 2005			December 31, 2004			December 31, 2005			December 31, 2004
Net sales	$	317,287		$	280,788		$	268,376		$	1,124,681		$	1,027,958
Cost of goods sold		189,627			187,126			170,209			715,666			658,543
Gross margin		127,660			93,662			98,167			409,015			369,415
Operating expenses:
Marketing and administration		18,905			18,199			19,150			73,213			71,948
Research and development		12,981			12,689			10,381			50,587			37,975
Restructuring costs								(996	)					(996	)
Operating income		95,774			62,774			69,632			285,215			260,488
Nonoperating (income) expense:
Interest expense		1,705			1,703			3,228			7,256			13,512
Interest income		(1,572	)		(882	)		(1,015	)		(4,156	)		(5,003	)
Currency (gains) losses		765			(1,083	)		360			1,248			1,907
Loss on the extinguishment of debt		0						61,403			0			61,403
Other, net		477			1,793			(5,001	)		1,338			(9,862	)
Total nonoperating expense		1,375			1,531			58,975			5,686			61,957
Income before income taxes, equity in loss of joint venture and minority interests		94,399			61,243			10,657			279,529			198,531
Income tax benefit		(42,820	)		(29,973	)		(61,763	)		(66,331	)		(40,119	)
Income before equity in loss of joint venture and minority interests		137,219			91,216			72,420			345,860			238,650
Equity in loss of joint venture		0			0			0			0			(1,717	)
Minority interests		(2,423	)		(1,452	)		(2,446	)		(7,658	)		(10,732	)
Net income	$	134,796		$	89,764		$	69,974		$	338,202		$	226,201
Basic income per share	$	0.61		$	0.42		$	0.34		$	1.58		$	1.09
Diluted income per share	$	0.59		$	0.40		$	0.32		$	1.49		$	1.02
Weighted average shares used in computing basic income per share		221,164,731			214,706,291			208,099,813			213,513,110			207,713,837
Weighted average shares used in computing diluted income per share		228,284,715			227,148,309			222,103,839			226,449,944			221,047,946

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	December 31, 2005			(Unaudited) September 30, 2005			December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	153,611		$	143,247		$	92,314
Accounts receivable, net		118,050			123,984			140,728
Inventories		122,068			132,220			127,564
Prepaid and other current assets		39,542			35,337			29,724
Total current assets		433,271			434,788			390,330
Property, plant and equipment, net		503,893			510,463			444,670
Deferred tax assets, net		198,674			176,303			119,835
Other assets		51,328			51,553			55,107
Total assets	$	1,187,166		$	1,173,107		$	1,009,942
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	5,096		$	15,444		$	24,399
Accounts payable		105,378			103,933			124,083
Accrued liabilities		30,412			15,409			37,743
Deferred revenue		784			13,261			0
Accrued wages and salaries		21,990			28,011			19,117
Income taxes payable		11,315			4,995			10,282
Total current liabilities		174,975			181,053			215,624
Long-term debt, less current portion		34,821			106,706			116,082
Pension and similar liabilities		108,873			107,231			116,427
Other liabilities		37,761			81,396			72,432
Total liabilities		356,430			476,386			520,565
Minority interests		54,136			51,714			46,479
Commitments and contingencies
Stockholders’ equity:
Preferred stock
Common stock		2,223			2,216			2,091
Additional paid-in capital		190,180			178,432			154,736
Retained earnings		637,007			502,211			308,351
Accumulated other comprehensive loss		(48,411	)		(33,905	)		(17,389	)
Deferred compensation		(128	)		(319	)		(1,263	)
Treasury stock		(4,271	)		(3,628	)		(3,628	)
Total stockholders’ equity		776,600			645,007			442,898
Total liabilities and stockholders’ equity	$	1,187,166		$	1,173,107		$	1,009,942

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; Dollars in thousands)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2005			2005			2004			2005			2004
Cash Flows from Operating Activities:
Net income	$	134,796		$	97,910		$	69,974		$	338,202		$	226,201
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,320			14,741			12,528			57,763			44,135
Interest accretion		0			0			1,543			0			5,248
Minority interests		2,423			1,452			2,446			7,658			10,732
Stock compensation		190			174			502			967			2,310
Equity in loss of joint venture		0			0			0			0			1,717
Working capital and other		(43,652	)		(39,169	)		20,195			(101,194	)		(7,299	)
Net cash provided by operating activities		109,077			75,108			107,188			303,396			283,044
Cash Flows from Investing Activities:
Capital expenditures		(21,171	)		(32,259	)		(51,738	)		(159,060	)		(149,811	)
Purchase of business, net of cash acquired		0			0			0			0			(57,226	)
Proceeds from sale of property, plant and equipment		15			6			19			21			91
Net cash used in investing activities		(21,156	)		(32,253	)		(51,719	)		(159,039	)		(206,946	)
Cash Flows from Financing Activities:
Net short-term borrowings		(1,503	)		(60	)		741			(1,735	)		(29,811	)
Proceeds from issuance of long-term debt		0			60,000			0			60,000			60,014
Principal payments on long-term debt		(78,515	)		(66,523	)		(71,485	)		(149,482	)		(113,407	)
Debt financing fees		0			(1,184	)		0			(1,184	)		0
Proceeds from issuance of common stock		1,944			7,752			2,381			14,817			4,826
Dividends to minority interest		0			0			0			(9,546	)		(4,765	)
Net cash used in financing activities		(78,074	)		(15	)		(68,363	)		(87,130	)		(83,143	)
Effect of exchange rate changes on cash and cash equivalents		516			(590	)		1,900			4,069			2,500
Net increase (decrease) in cash and cash equivalents		10,363			42,250			(10,994	)		61,296			(4,545	)
Cash and cash equivalents at beginning of period		143,247			100,997			103,308			92,314			96,859
Cash and cash equivalents at end of period	$	153,610		$	143,247		$	92,314		$	153,610		$	92,314