| Statement Of Income (USD $) | ||||
| In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Net sales | 282.9 | 531.4 | 496.9 | 1032.8 |
| Cost of goods sold | 248 | 248.6 | 442.3 | 490.7 |
| Gross profit | 34.9 | 282.8 | 54.6 | 542.1 |
| Operating expenses: | ||||
| Marketing and administration | 42.5 | 27.1 | 72.3 | 57.7 |
| Research and development | 9.9 | 10 | 19.5 | 20.3 |
| Restructuring costs | 5.6 | 3.2 | 12.3 | 3.2 |
| Operating (loss) income | -23.1 | 242.5 | -49.5 | 460.9 |
| Non-operating (income) expense: | ||||
| Interest expense | 0.2 | 0.3 | 0.5 | 0.6 |
| Interest income | -5.8 | -11.3 | -17.5 | -24.1 |
| (Increase) decrease in fair value of warrant | -10.1 | 12.3 | (10) | 221.7 |
| Other, net | -0.6 | 2.5 | 2 | 4 |
| Total non-operating (income) expense | -16.3 | 3.8 | (25) | 202.2 |
| (Loss) income before income tax (benefit) expense and equity in earnings of joint venture | -6.8 | 238.7 | -24.5 | 258.7 |
| Income tax (benefit) expense | -9.7 | 61.2 | -28.6 | 121.9 |
| Income before equity in earnings of joint venture | 2.9 | 177.5 | 4.1 | 136.8 |
| Equity in earnings of joint venture, net of tax | -3.3 | 0 | -3.3 | 0 |
| Net (loss) income | -0.4 | 177.5 | 0.8 | 136.8 |
| Net loss (income) attributable to noncontrolling interests | 1.8 | -1.4 | 2.6 | -2.5 |
| Net income attributable to MEMC stockholders | 1.4 | 176.1 | 3.4 | 134.3 |
| Basic income per share | 0.01 | 0.77 | 0.02 | 0.59 |
| Diluted income per share | 0.01 | 0.76 | 0.02 | 0.58 |
| Weighted-average shares used in computing basic income per share | 223.5 | 228.3 | 223.5 | 228.4 |
| Weighted-average shares used in computing diluted income per share | 224 | 230.7 | 224.1 | 231.1 |
| Statement Of Financial Position Classified (USD $) | ||
| In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
| Current assets: | ||
| Cash and cash equivalents | 889.9 | 988.3 |
| Short-term investments | 134.9 | 148.4 |
| Accounts receivable, less allowance for doubtful accounts of $9.7 and $5.9 in 2009 and 2008, respectively | 172.5 | 197.3 |
| Inventories | 108.6 | 81.3 |
| Prepaid and other current assets | 97.4 | 38.9 |
| Total current assets | 1403.3 | 1454.2 |
| Investments | 232.5 | 284.7 |
| Property, plant and equipment, net of accumulated depreciation of $516.9 and $478.4 in 2009 and 2008, respectively | 1046.3 | 1041.2 |
| Deferred tax assets, net | 70.3 | 69.7 |
| Customer warrant | 23.8 | 13.8 |
| Other assets | 68.1 | 73.1 |
| Total assets | 2844.3 | 2936.7 |
| Current liabilities: | ||
| Current portion of long-term debt | 5.2 | 6.1 |
| Accounts payable | 141.1 | 162.4 |
| Accrued liabilities | 63.6 | 67.5 |
| Accrued wages and salaries | 30.5 | 31.7 |
| Customer deposits | 105.9 | 187 |
| Income taxes payable | 23 | 17.9 |
| Total current liabilities | 369.3 | 472.6 |
| Long-term debt, less current portion | 22.1 | 26.1 |
| Pension and post-employment liabilities | 44.3 | 46.3 |
| Deferred revenue | 91.5 | 88.8 |
| Other liabilities | 185.2 | 186.1 |
| Total liabilities | 712.4 | 819.9 |
| Commitments and contingencies | 0 | 0 |
| Stockholders' equity: | ||
| Preferred stock, $.01 par value, 50.0 shares authorized, none issued and outstanding at 2009 and 2008 | 0 | 0 |
| Common stock, $.01 par value, 300.0 shares authorized, 223.5 and 233.3 issued at 2009 and 2008, respectively | 2.3 | 2.3 |
| Additional paid-in capital | 443.2 | 425.6 |
| Retained earnings | 2150.8 | 2147.1 |
| Accumulated other comprehensive loss | -39.9 | -55.6 |
| Treasury stock, 9.8 and 8.8 shares in 2009 and 2008, respectively | -453.3 | -437.4 |
| Total MEMC stockholders' equity | 2103.1 | 2,082 |
| Noncontrolling interests | 28.8 | 34.8 |
| Total stockholders' equity | 2131.9 | 2116.8 |
| Total liabilities and stockholders' equity | 2844.3 | 2936.7 |
| Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
| In Millions, except Per Share data | Jun. 30, 2009
| Dec. 31, 2008
|
| Accounts receivable, allowance for doubtful accounts | 9.7 | 5.9 |
| Property, plant and equipment, accumulated depreciation | 516.9 | 478.4 |
| Preferred stock, par value | 0.01 | 0.01 |
| Preferred stock, shares authorized | 50 | 50 |
| Preferred stock, issued | 0 | 0 |
| Preferred stock, outstanding | 0 | 0 |
| Common stock, par value | 0.01 | 0.01 |
| Common stock, shares authorized | 300 | 300 |
| Common stock, issued | 223.5 | 233.3 |
| Treasury stock, shares | 9.8 | 8.8 |
| Statement Of Cash Flows Indirect (USD $) | ||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Cash flows from operating activities: | ||
| Net income | 0.8 | 136.8 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 57.3 | 48.3 |
| Stock-based compensation | 18.2 | 22.2 |
| (Increase) decrease in fair value of warrant | (10) | 221.7 |
| Working capital and other | -64.5 | -26.8 |
| Net cash provided by operating activities | 1.8 | 402.2 |
| Cash flows from investing activities: | ||
| Proceeds from sale and maturities of investments | 114.3 | 312.9 |
| Purchases of investments | -10.9 | -240.2 |
| Capital expenditures | -98.7 | -169.2 |
| Other | 0.1 | 0 |
| Net cash provided by (used in) investing activities | 4.8 | -96.5 |
| Cash flows from financing activities: | ||
| Net (repayments of) proceeds from customer deposits related to long-term supply agreements | -80.1 | 48.5 |
| Principal payments on long-term debt | -3.2 | -2.9 |
| Excess tax benefits from stock-based compensation arrangements | 0.2 | 18.6 |
| Dividend to noncontrolling interest | 0 | -3.2 |
| Common stock repurchased | -15.8 | -154.9 |
| Proceeds from issuance of common stock | 0.5 | 18.6 |
| Net cash used in financing activities | -98.4 | -75.3 |
| Effect of exchange rate changes on cash and cash equivalents | -6.6 | 21.2 |
| Net (decrease) increase in cash and cash equivalents | -98.4 | 251.6 |
| Cash and cash equivalents at beginning of period | 988.3 | 859.3 |
| Cash and cash equivalents at end of period | 889.9 | 1110.9 |
| Notes to Financial Statements | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (1) Basis of Presentation | (1) Basis of Presentation The accompanying unaudited condensed consolidated financial statements of MEMC Electronic Materials, Inc. and subsidiaries (MEMC), in our opinion, include all adjustments (consisting of normal, recurring items) necessary to present fairly our financial position and results of operations and cash flows for the periods presented. MEMC has presented the condensed consolidated financial statements in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X and consequently, these financial statements do not include all disclosures required by U.S. generally accepted accounting principles (US GAAP). These unaudited condensed consolidated financial statements should be read in conjunction with our annual report on Form 10-K for the fiscal year ended December31, 2008, which contains MEMCs audited financial statements for such year. Operating results for the three and six-month periods ended June30, 2009 are not necessarily indicative of the results that may be expected for the year ending December31, 2009. In preparing our financial statements, we use estimates and assumptions that may affect reported amounts and disclosures. Estimates are used when accounting for investments, depreciation, amortization, accrued liabilities, employee benefits, derivatives, stock based compensation, income taxes, restructuring costs, inventory valuation and asset valuation allowances, among others. To the extent there are material differences between the estimates and actual results, our future results of operations would be affected. Certain prior year amounts relating to noncontrolling interests have been reclassified to conform to the current year presentation (see Note 2). |
| (2) Adoption of New Accounting Pronouncements | (2) Adoption of New Accounting Pronouncements Noncontrolling Interests In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No.160, Noncontrolling Interest in Consolidated Financial Statements, an amendment of ARB No.51 (SFAS 160). SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as minority interest, is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Among other requirements, this statement requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. The requirements of SFAS 160 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December15, 2008. MEMC adopted SFAS 160 on January1, 2009, and as a result, now includes noncontrolling interests in consolidated net income for current and prior periods. Earnings per share, however, continue to be based on the net income attributable to MEMC stockholders. Additionally, comprehensive income attributable to the noncontrolling interests is deducted from consolidated comprehensive income to arrive at the comprehensive income attributable to MEMC stockholders. Noncontrolling interests have also been reclassified to equity for current and prior periods on the condensed consolidated balance sheet and stockholders equity (see Note 10). The adoption of SFAS 160 did not have a material impact on our financial statements. Fair Value Measurements and Investments In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP amends FASB Statement No.107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No.28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This FSP is effective for interim reporting periods ending after June15, 2009. MEMC adopted this FSP effective April1, 2009. In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the other-than-temporary impairment guidance in USGAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. This FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securit |
| (3) Restructuring Costs | (3) Restructuring Costs In order to better align manufacturing capabilities to projected manufacturing needs, MEMC committed to workforce reductions during the first six months of 2008 and again in 2009. As a result, we recorded expenses of $12.3 million and $3.2 million related to one-time termination benefits during the six months ended June30, 2009 and 2008, respectively, including $5.6 million and $3.2 million during the three months ended June30, 2009 and 2008, respectively. The 2009 amount includes $0.4 million of outplacement costs and a $0.3 million expense related to one of our defined benefit pension plans (see Note 12). The following table summarizes the balances recorded in accrued liabilities associated with these costs: SixMonthsEnded June30, In millions 2009 2008 Balance at January1 $ $ Accrued restructuring charges 12.8 3.2 Cash payments (12.6 ) Adjustments (0.2 ) Balance at June30 $ $ 3.2 Due to the changes in projected manufacturing needs, we performed an asset impairment analysis of certain long-lived asset groups as of March31, 2009. That analysis indicated that our estimated projected net undiscounted cash flows exceeded the net book values of the asset groups analyzed and accordingly, there were no material asset impairments as of March31, 2009. |
| (4) Fair Value Measurements | (4) Fair Value Measurements The following table summarizes the financial instruments measured at fair value on a recurring basis classified in the fair value hierarchy (Level 1, 2 or 3) based on the inputs used for valuation in the accompanying condensed consolidated balance sheets: As of June30, 2009 Assets (liabilities) in millions Level1 Level2 Level3 Total Available for sale investments $ 198.9 $ 88.4 $ 17.3 $ 304.6 Trading investments 45.0 45.0 Auction rate securities right 2.0 2.0 Suntech warrant 23.8 23.8 Currency forward contracts (3.8 ) (3.8 ) $ 195.1 $ 88.4 $ 88.1 $ 371.6 During November 2008, we accepted an offer by our investment broker to receive an auction rate securities right (ARS Right) that would substantially ensure recovery to par of our auction rate securities (ARS) between June 2010 and July 2012. We have elected the fair value option for the ARS Right because its value is highly correlated to the value of the ARS, which are also marked to market. We have recorded the ARS Right to prepaid and other current assets and non-operating (income) expense, other. During the three and six months ended June30, 2009, we recorded a gain of $0.8 million and a loss of $4.2 million, respectively, related to the ARS Right. The ARS Right is the only item eligible for the fair value option treatment in prepaid and other current assets. We used a lattice model to determine the fair value of the Suntech warrant. Determining the appropriate fair value model and calculating the fair value of the warrant requires making estimates and assumptions relating to Suntechs stock price volatility, interest rate, dividends, marketability and expected return requirements. The carrying amount of our outstanding long-term debt at June30, 2009 and December31, 2008 was $27.3 million and $32.2 million, respectively. The estimated fair value of that debt was $26.3 million and $31.2 million, respectively, at June30, 2009 and December31, 2008. The fair value of our currency forward contracts is measured by the amount that would have been paid to liquidate and repurchase all open contracts and was a loss of $3.8 million at June30, 2009 and a gain of $1.6 million at December31, 2008. The notional amount of our currency forward contracts was $42.6 million and $60.9 million as of June30, 2009 and December31, 2008, respectively. The following table summarizes changes in Level 3 assets measured at fair value on a recurring basis for the six months ended June30, 2009: Fair Value Measurements UsingSignificantUnobservable Inputs (Level 3) In millions Availablefor Sale Investments Trading Investments AuctionRate Securities Right Suntech Warrant Total Balance at December31, 2008 $ 22.8 $ 44.1 $ 6.2 $ 13.8 $ 86.9 Total unrealized gains (losses): Included in earnings(1) (2.3 ) 4.9 (4.2 ) 10.0 |
| (5) Comprehensive Income | (5) Comprehensive Income Comprehensive income consists of the following: ThreeMonthsEnded June30, Six Months Ended June30, In millions 2009 2008 2009 2008 Net (loss) income $ (0.4 ) $ 177.5 $ 0.8 $ 136.8 Other comprehensive income (loss), net of tax: Net translation adjustment 18.5 (19.1 ) (14.4 ) 19.1 Net unrealized gain (loss) on available-for-sale securities 25.2 0.1 27.0 (3.0 ) Other comprehensive income (loss), net of tax 43.7 (19.0 ) 12.6 16.1 Total comprehensive income 43.3 158.5 13.4 152.9 Net loss (income) attributable to noncontrolling interests 1.8 (1.4 ) 2.6 (2.5 ) Net translation adjustment attributable to noncontrolling interests 3.4 3.4 Comprehensive income attributable to MEMC stockholders $ 48.5 $ 157.1 $ 19.4 $ 150.4 |
| (6) Earnings Per Share | (6) Earnings Per Share For the three month periods ended June30, 2009 and 2008, basic and diluted earnings per share (EPS) were calculated as follows: ThreeMonthsEnded June30, 2009 ThreeMonthsEnded June30, 2008 In millions, except per share data Basic Diluted Basic Diluted EPS numerator: Net income attributable to MEMC stockholders $ 1.4 $ 1.4 $ 176.1 $ 176.1 EPS denominator: Weighted average shares outstanding 223.5 223.5 228.3 228.3 Stock options and restricted stock units 0.5 2.4 Total shares 223.5 224.0 228.3 230.7 Earnings per share $ 0.01 $ 0.01 $ 0.77 $ 0.76 For the six month periods ended June30, 2009 and 2008, basic and diluted earnings per share were calculated as follows: Six Months Ended June30, 2009 Six Months Ended June30, 2008 In millions, except per share data Basic Diluted Basic Diluted EPS numerator: Net income attributable to MEMC stockholders $ 3.4 $ 3.4 $ 134.3 $ 134.3 EPS denominator: Weighted average shares outstanding 223.5 223.5 228.4 228.4 Stock options and restricted stock units 0.6 2.7 Total shares 223.5 224.1 228.4 231.1 Earnings per share $ 0.02 $ 0.02 $ 0.59 $ 0.58 For the three months ended June30, 2009 and 2008, 8.8million and 1.9million, respectively, of options and restricted stock units were excluded from the calculation of diluted EPS because their effect was antidilutive. For the six months ended June30, 2009 and 2008, 7.4million and 1.8million shares, respectively, of options and restricted stock units were excluded from the calculation of diluted EPS because their effect was antidilutive. |
| (7) Inventories | (7) Inventories Inventories consist of the following: In millions As of June30,2009 As of December31,2008 Raw materials and supplies $ 29.2 $ 18.8 Goods in process 29.8 6.4 Finished goods 49.6 56.1 $ 108.6 $ 81.3 During the first six months of 2009, we recorded $10.4 million related to a lower of cost or market adjustment on our inventory and $8.4 million related to the estimated shortfall to an annual purchase obligation associated with a take or pay agreement to cost of goods sold. We also recorded period expenses to cost of goods sold for unallocated fixed overhead costs of $36.2 million for the three months ended March31, 2009. There were no unallocated fixed overhead costs recorded as period expenses for the three months ended June30, 2009. We also had no similar material lower of cost or market adjustments, take or pay agreement shortfall charges or unallocated fixed overhead costs recorded as period expenses during the first six months of 2008. |
| (8) Investments | (8) Investments Short- and long-term investments measured and recorded at fair value consist of the following: As of June30, 2009 In millions Cost Unrealized Gains/ (Losses) and Other-than- temporary Impairments Recorded in Earnings(1) Other-than- temporary Impairments inAccumulated Other Comprehensive Loss Unrealized Gains/(Losses) in Other Comprehensive Income FairValue FairValueof Investmentsin UnrealizedLoss Positions with no Recognized Losses Unrealized Losses on Investments in Unrealized Loss Positions with no Recognized Losses Greater than twelve months Less than twelve months Items measured at fair value on a recurring basis: Trading securities: Auction rate securities $ 47.4 $ (2.4 ) $ $ $ 45.0 $ $ $ Available for sale securities: Fixed income funds 200.0 13.0 (14.1 ) 198.9 198.9 (14.1 ) Corporate debt securities 48.5 (9.7 ) 1.2 (1.9 ) 38.1 28.9 (1.9 ) Asset-backed securities 24.9 (2.2 ) 0.1 (0.8 ) 22.0 21.6 (0.8 ) Mortgage-backed securities 39.1 (4.6 ) (1.6 ) (4.6 ) 28.3 24.6 (4.6 ) Equity investment 12.4 4.9 17.3 324.9 (3.5 ) (0.3 ) (16.5 ) 304.6 274.0 (7.3 ) (14.1 ) Total $ 372.3 $ (5.9 ) $ (0.3 ) $ (16.5 ) $ 349.6 $ 274.0 $ (7.3 ) $ (14.1 ) As of December31, 2008 In millions Cost Unrealized Gain/(Loss) Recordedin Earnings(1) Unrealized Gain/(Loss) in Other Comprehensive Income FairValue Items measured at fair value on a recurring basis: Trading securities: Auction rate securities $ 51.4 $ (7.3 ) $ $ 44.1 Available for sale securities: Fixed Income Funds 200.0 2.0 (33.2 ) 168.8 Corporate debt securities 94.6 (8.3 ) (2.3 ) 84.0 Asset-backed securities 46.4 (1.2 ) (4.6 ) 40.6 Mortgage-backed securities 47.5 (5.0 ) (7.6 ) 34.9 Beneficiary certificates bond fund 7.1 0.3 7.4 Equity investment 12.4 4.2 16.6 408.0 (12.5 ) (43.2 ) 352.3 Total $ 459.4 $ (19.8 ) $ (43.2 ) $ 396.4 (1) Unrealized gains/(losses) were recorded to non-operating (income) expense in the consolidated statements of income. The carrying value of short- and long-term investments consists of the following: In millions As of June30,200 |
| (9) Debt | (9) Debt We have short-term committed loan agreements renewable annually of approximately $17.6 million at June30, 2009, of which there were no short-term borrowings outstanding. Of the $17.6 million committed short-term loan agreements, $6.9 million is unavailable because it relates to the issuance of third party letters of credit. Interest rates are negotiated at the time of the borrowings. We have long-term committed loan agreements of approximately $262.8 million at June30, 2009, of which $27.3 million is outstanding. Of the $262.8 million committed long-term loan agreements, $85.6 million is unavailable because it relates to the issuance of third party letters of credit. We are currently in compliance with all debt covenants. |
| (10) Stockholders' Equity | (10) Stockholders Equity The following table presents the change in total stockholders equity for the six months ended June30, 2009. In millions MEMCStockholders Equity NoncontrollingInterest Total Balance, January1, 2009 $ 2,082.0 $ 34.8 $ 2,116.8 Net income (loss) 3.4 (2.6 ) 0.8 Other comprehensive income (loss), net of tax 16.0 (3.4 ) 12.6 Stock plans, net 17.5 17.5 Common stock repurchases (15.8 ) (15.8 ) Balance, June30, 2009 $ 2,103.1 $ 28.8 $ 2,131.9 Stock-Based Compensation We have equity incentive plans that provide for the award of non-qualified stock options, restricted stock, performance shares, and restricted stock units to employees, non-employee directors, and consultants. As of June30, 2009, there were 7.7million shares authorized for future grant under these plans. The following table presents information regarding outstanding stock options as of June30, 2009 and changes during the six months then ended with regard to stock options: Shares Weighted- Average ExercisePrice Aggregate IntrinsicValue (in millions) Weighted- Average Remaining Contractual Life Outstanding at December31, 2008 5,303,783 $ 40.29 Granted 4,478,100 13.67 Exercised (70,756 ) 6.69 Forfeited (290,047 ) 31.76 Expired (262,774 ) 36.68 Outstanding at June30, 2009 9,158,306 $ 27.90 $ 24.1 8years Options exercisable at June30, 2009 2,132,810 $ 30.69 $ 5.8 7 years The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between our closing stock price on the last trading day of the second quarter of 2009 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June30, 2009. This amount changes based on the fair market value of our stock. Total intrinsic value of options exercised for the six months ended June30, 2009 and 2008 was $0.8 million and $70.1 million, respectively. For the six months ended June30, 2009 and 2008, cash received from option exercises under option plans was $0.5 million and $18.6 million, respectively and the actual tax benefit realized for the tax deductions from option exercises was $0.4 million and $22.2million, respectively. We estimate the fair value of options using the Black-Scholes option-pricing model for our ratable and cliff vesting options. We have determined that our historical stock price volatility and historical pattern of option exercises are appropriate indicators of expected volatility and expected term. During March 2009, we issued options to our new Chief Executive Officer. Because we do not have a historical pattern of option exercises for our new Chief Executive Officer, and because past exercise patterns for the same level of execut |
| (11) Income Taxes | (11) Income Taxes During the three months ended June30, 2009, we recorded an income tax benefit of $9.7 million and an effective tax rate of 142.6%, compared to an income tax expense of $61.2 million and an effective tax rate of 25.6% for the three months ended June30, 2008. The income tax benefit for the 2009 second quarter primarily resulted from tax losses in higher rate jurisdictions offset by taxable income in lower rate jurisdictions and a tax benefit associated with a newly planned remittance of foreign earnings. During the three months ended June30, 2009, management determined that the undistributed earnings of one of our foreign wholly owned subsidiaries would be remitted to the U.S. in the foreseeable future. These earnings were previously considered permanently reinvested in the business and the unrecognized deferred tax asset related to these earnings was not recognized. The deferred tax effect of this newly planned remittance was recorded as a discrete net income tax benefit in the amount of $3.4 million. As of June30, 2009, federal and state income taxes have not been provided on accumulated but undistributed earnings of foreign subsidiaries aggregating approximately $805.3 million because such earnings have been permanently reinvested in the business. The determination of the amount of the unrecognized deferred tax liability related to our undistributed earnings is not practicable. During the six months ended June30, 2009, we recorded an income tax benefit of $28.6 million compared to an income tax expense of $121.9 million for the six months ended June30, 2008. The effective tax rate was 116.7% and 47.1% for the six months ended June30, 2009 and 2008, respectively. We recorded a tax benefit on all available tax losses that can be carried back under local law because there is sufficient taxable income in the allowable carry back period to absorb those losses. There was no valuation allowance of deferred tax assets attributable to subsidiaries with tax loss carryforwards due to anticipated taxable income within the tax loss carryforward period allowable under the law in the respective countries of five to seven years. We are currently under a tax examination by the Internal Revenue Service for the 2006 and 2007 tax years in which it is reasonably possible that some portions of the examination could be completed within the next twelve months; however, the results of the examination and any potential settlement are not reasonably estimable at this time. There is a risk, however, that the amounts ultimately settled upon resolution of the audit could be materially different from the amounts previously included in our income tax liabilities and, therefore, could have a material impact on our tax provision, net income, tax liabilities and cash flows. During the six months ended June30, 2009, we recorded additional tax expense of approximately $1.7 million primarily related to interest and penalties assessed by taxing authorities related to exams for the 2006 and 2007 tax years. |
| (12) Benefit Plans | (12) Benefit Plans Net periodic postretirement benefit cost consists of the following: ThreeMonthsEnded June30, 2009 ThreeMonthsEnded June30, 2008 Six Months Ended June30, 2009 Six Months Ended June30, 2008 In millions Pension Plans HealthCare Plan Pension Plans HealthCare Plan Pension Plans HealthCare Plan Pension Plans HealthCare Plan Service cost $ 0.8 $ $ 0.7 $ $ 1.6 $ $ 1.5 $ Interest cost 2.5 0.4 2.5 0.4 5.0 0.8 5.1 0.8 Expected return on plan assets (3.3 ) (2.7 ) (6.6 ) (5.4 ) Amortization of prior service costs and net actuarial loss/(gain) 1.3 (0.6 ) 0.1 (0.3 ) 2.6 (1.2 ) 0.2 (0.6 ) Settlement and curtailment loss, net 0.3 Net periodic postretirement benefit cost $ 1.3 $ (0.2 ) $ 0.6 $ 0.1 $ 2.9 $ (0.4 ) $ 1.4 $ 0.2 The settlement and curtailment loss, net is related to the restructuring charges discussed in Note 3 above. |
| (13) Long-term Customer Contracts | (13) Long-term Customer Contracts During February 2009, we amended two of our long-term solar wafer supply agreements and in July 2009, we further amended one of these agreements. Under the February 2009 amendments, the potential aggregate revenues to MEMC under the agreements for sales in 2009 and aggregate revenues for sales over the remaining term of the contracts remain unchanged, but volume increases and price reductions for 2009 were effectuated. The July 2009 amendment with one of our customers provides for an additional price reduction and volume increase for the second half of 2009. The July 2009 amendment with this customer also provides a deferral mechanism for a potential 2009 purchase shortfall by the customer (from the increased volume commitment), by allowing the customer to make up the purchase shortfall in equal increments over the next five years. Such deferred volume amounts will be added to the customers minimum purchase requirements for future contract years. There were no changes to the requirements for security deposits or letters of credit under any of the 2009 amendments, other than to extend the time to comply fully with the 2009 letter of credit requirement for one of the agreements. A third solar wafer customer has not made a scheduled refundable capacity reservation deposit that was due under their agreement in early January 2009, nor have they made any purchases under the agreement in 2009. On April27, 2009, a fourth solar wafer supply agreement customer, Conergy AG, filed suit against us seeking to void all or parts of its long-term supply agreement with us. On July10, 2009, MEMC filed a formal answer to the complaint denying the allegations and filed a motion to dismiss certain counts of the complaint. During the quarter ended June30, 2009, MEMC applied approximately $44.1 million of security deposits against outstanding accounts receivable balances for two customers in accordance with the terms of the long-term customer contracts and instructed the customers to replenish the deposits. The loss of any one of these customers could potentially adversely affect our future operating results. |
| (14) Commitments and Contingencies | (14) Commitments and Contingencies On June26, 2009, we entered into a binding term sheet (the Term Sheet) with Q-Cells SE (Q-Cells) reflecting our agreement to form a joint venture for the purpose of building large scale solar power plants. MEMC has agreed to invest up to approximately $100 million in the venture in three separate payments during the third and fourth quarters of 2009 upon formation of the joint venture entity. The joint venture company will contract with Q-Cells International to develop, acquire and build the plants. Q-Cells International will order the cells for the plants from Q-Cells. Q-Cells will purchase the necessary solar wafers from MEMC at set prices. Once the first project is fully constructed, the parties intend to sell it to a third party. The parties can then return the proceeds of that sale to the joint venture partners or leave the investment in the entity for one or more future solar power plant projects through mutual agreement by the parties. MEMC and Q-Cells will each have two seats on the board of the joint venture company. The parties are currently negotiating final documents for the joint venture consistent with the terms of the Term Sheet. The joint venture will be accounted for under the equity method of accounting. As MEMC sells wafers to Q-Cells, the revenue from those sales will be recognized consistent with MEMCs revenue recognition policy, and the costs associated with those wafers will be included in cost of goods sold. MEMC will defer its pro rata share (50%)of the net profit associated with the sale of the wafers, consistent with its ownership in the joint venture, until the project is sold to a third party, at which point all previously deferred amounts will be recognized as income, as well as any gain or loss on the sale of the project. The joint venture income elimination is recorded in MEMCs consolidated statements of income as equity in earnings of joint venture, net of tax. Indemnification We have agreed to indemnify some of our customers against claims of infringement of the intellectual property rights of others in our sales contracts with these customers. Historically, we have not paid any claims under these indemnification obligations and we do not have any pending indemnification claims as of June30, 2009. Legal Proceedings We are involved in various legal proceedings which arise in the ordinary course of business. Although it is not possible to predict the outcome of these matters, we believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position, cash flows or results of operations. BP Solar International v. MEMC Electronic Materials, Inc. and MEMC Pasadena, Inc. In April 2007, BP Solar International, Inc. filed suit against MEMC Electronic Materials, Inc. and MEMC Pasadena, Inc. in the Circuit Court for Frederick County, Maryland (Civil Number 10-C-07-001240) alleging non-delivery of polysilicon powder for 2006. Plaintiff BP Solar subsequently amended the complaint on four separate occasions, most recently on May 21, 2009. The final complaint filed by Plaintiff alleged |
| (15) Recently Issued Accounting Pronouncements | (15) Recently Issued Accounting Pronouncements In December 2008, the FASB issued FSP FAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets. This FSP amends SFAS No.132 (revised 2003), Employers Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employers disclosures about plan assets of a defined benefit pension or other postretirement plan, including investment policies and strategies, major categories of plan assets, inputs and valuation techniques used to measure the fair value of plan assets and significant concentrations of risk within plan assets. This FSP is effective for fiscal years ending after December15, 2009, with earlier application permitted. Upon initial application, the provisions of this FSP are not required for earlier periods that are presented for comparative purposes. We are currently evaluating the disclosure requirements of this new FSP, but we believe its adoption will not have an impact on our consolidated results of operations and financial condition. In June2009, the FASB issued SFAS No.166, Accounting for Transfers of Financial Assets (SFAS 166).SFAS 166 removes the concept of a qualifying special-purpose entity from SFAS No.140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilitiesand removes the exception from applying FASB Interpretation No.46 (revised December2003), Consolidation of Variable Interest Entities.This statement also clarifies the requirements for isolation and limitations on portions of financial assets that are eligible for sale accounting.This statement is effective for fiscal years beginning after November15,2009.We are currently evaluating the impact of adopting this standard on our consolidated results of operations and financial condition. In June2009, the FASB issued SFAS No.167, Amendments to FASB Interpretation No.46R (SFAS 167).SFAS 167 amends FIN 46R to require an analysis to determine whether a variable interest gives acompany a controlling financial interest in a variable interest entity.This statement requires an ongoing reassessment of financial responsibility, including interests in entities formed prior to the effective date of SFAS 167, and eliminates the quantitative approach previously required for determining whether a company is the primary beneficiary.This statement is effective for fiscal years beginning after November15,2009.We are currently evaluating the impact of adopting this standard on our consolidated results of operations and financial condition. |
| Document Information | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Document Information [Text Block] | |
| Document Type | 10-Q |
| Amendment Flag | false |
| Amendment Description | N.A. |
| Document Period End Date | 2009-06-30 |
| Entity Information (USD $) | |||
| 6 Months Ended
Jun. 30, 2009 | Jul. 21, 2009
| Jun. 30, 2008
| |
| Entity [Text Block] | |||
| Trading Symbol | WFR | ||
| Entity Registrant Name | MEMC ELECTRONIC MATERIALS INC | ||
| Entity Central Index Key | 0000945436 | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity Well-known Seasoned Issuer | Yes | ||
| Entity Current Reporting Status | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Filer Category | Large Accelerated Filer | ||
| Entity Common Stock, Shares Outstanding | 223,551,037 | ||
| Entity Public Float | $14,053,990,172 |
