| Statement Of Income (USD $) | ||||
| In Millions, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
| Net sales | $310 | $546 | 806.9 | 1578.8 |
| Cost of goods sold | 289.5 | 276.3 | 731.8 | 767 |
| Gross profit | 20.5 | 269.7 | 75.1 | 811.8 |
| Operating expenses: | ||||
| Marketing and administration | 37.2 | 31.5 | 109.5 | 89.2 |
| Research and development | 10.3 | 10.3 | 29.8 | 30.6 |
| Restructuring and impairment costs | 39.7 | 0.4 | 52 | 3.6 |
| Operating (loss) income | -66.7 | 227.5 | -116.2 | 688.4 |
| Non-operating (income) expense: | ||||
| Interest expense | 0.4 | 0.8 | 0.9 | 1.4 |
| Interest income | -4.9 | -11.2 | -22.4 | -35.3 |
| (Increase) decrease in fair value of warrant | 6.3 | 9.6 | -3.7 | 231.3 |
| Other, net | 0.2 | 6.6 | 2.2 | 10.6 |
| Total non-operating (income) expense | 2 | 5.8 | (23) | 208 |
| (Loss) income before income tax (benefit) expense and equity in earnings of joint venture | -68.7 | 221.7 | -93.2 | 480.4 |
| Income tax (benefit) expense | -6.3 | 38.1 | -34.9 | 160 |
| (Loss) income before equity in earnings of joint venture | -62.4 | 183.6 | -58.3 | 320.4 |
| Equity in earnings of joint venture, net of tax | -2.5 | 0 | -5.8 | 0 |
| Net (loss) income | -64.9 | 183.6 | -64.1 | 320.4 |
| Net loss (income) attributable to noncontrolling interests | 0.3 | -0.8 | 2.9 | -3.3 |
| Net (loss) income attributable to MEMC stockholders | -64.6 | 182.8 | -61.2 | 317.1 |
| Basic (loss) income per share | -0.29 | 0.81 | -0.27 | 1.39 |
| Diluted (loss) income per share | -0.29 | 0.8 | -0.27 | 1.38 |
| Weighted-average shares used in computing basic (loss) income per share | 223.6 | 226.3 | 223.6 | 227.7 |
| Weighted-average shares used in computing diluted (loss) income per share | 223.6 | 227.6 | 223.6 | 230 |
| Statement Of Financial Position Classified (USD $) | ||
| In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Dec. 31, 2008 |
| Current assets: | ||
| Cash and cash equivalents | 792.2 | 988.3 |
| Short-term investments | 114.3 | 148.4 |
| Accounts receivable, less allowance for doubtful accounts of $9.7 and $5.9 in 2009 and 2008, respectively | 188.3 | 197.3 |
| Inventories | 110 | 81.3 |
| Prepaid and other current assets | 99.1 | 38.9 |
| Total current assets | 1303.9 | 1454.2 |
| Investments | 329.5 | 284.7 |
| Property, plant and equipment, net of accumulated depreciation of $547.7 and $478.4 in 2009 and 2008, respectively | 1065.4 | 1041.2 |
| Deferred tax assets, net | 82.4 | 69.7 |
| Customer warrant | 17.5 | 13.8 |
| Other assets | 81.1 | 73.1 |
| Total assets | 2879.8 | 2936.7 |
| Current liabilities: | ||
| Current portion of long-term debt | 5.5 | 6.1 |
| Accounts payable | 151.2 | 162.4 |
| Accrued liabilities | 87.6 | 67.5 |
| Accrued wages and salaries | 33.9 | 31.7 |
| Customer deposits | 83.6 | 187 |
| Income taxes payable | 6.3 | 17.9 |
| Total current liabilities | 368.1 | 472.6 |
| Long-term debt, less current portion | 23.4 | 26.1 |
| Pension and post-employment liabilities | 44.8 | 46.3 |
| Deferred revenue | 101.7 | 88.8 |
| Other liabilities | 217.9 | 186.1 |
| Total liabilities | 755.9 | 819.9 |
| Commitments and contingencies | - | - |
| Stockholders' equity: | ||
| Preferred stock, $0.1 par value, 50.0 shares authorized, none issued and outstanding at 2009 and 2008 | 0 | 0 |
| Common stock, $0.1 par value, 300.0 shares authorized, 223.4 and 233.3 issued at 2009 and 2008, respectively | 2.3 | 2.3 |
| Additional paid-in capital | 451.5 | 425.6 |
| Retained earnings | 2086.2 | 2147.1 |
| Accumulated other comprehensive income (loss) | 7.2 | -55.6 |
| Treasury stock, 9.8 and 8.8 shares in 2009 and 2008, respectively | -453.3 | -437.4 |
| Total MEMC stockholders' equity | 2093.9 | 2,082 |
| Noncontrolling interests | 30 | 34.8 |
| Total stockholders' equity | 2123.9 | 2116.8 |
| Total liabilities and stockholders' equity | 2879.8 | 2936.7 |
| Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
| In Millions, except Per Share data | Sep. 30, 2009
| Dec. 31, 2008
|
| Accounts receivable, allowance for doubtful accounts | 9.7 | 5.9 |
| Property, plant and equipment, accumulated depreciation | 547.7 | 478.4 |
| Preferred stock, par value | 0.1 | 0.1 |
| Preferred stock, shares authorized | 50 | 50 |
| Preferred stock, issued | 0 | 0 |
| Preferred stock, outstanding | 0 | 0 |
| Common stock, par value | 0.1 | 0.1 |
| Common stock, shares authorized | 300 | 300 |
| Common stock, issued | 223.4 | 233.3 |
| Treasury stock, shares | 9.8 | 8.8 |
| Statement Of Cash Flows Indirect (USD $) | ||
| In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
| Cash flows from operating activities: | ||
| Net (loss) income | -64.1 | 320.4 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 89.6 | 75.6 |
| Stock-based compensation | 26.6 | 34.1 |
| Impairment charges | 24.6 | 0.4 |
| (Increase) decrease in fair value of warrant | -3.7 | 231.3 |
| Working capital and other | -59.4 | -144.3 |
| Net cash provided by operating activities | 13.6 | 517.5 |
| Cash flows from investing activities: | ||
| Proceeds from sale and maturities of available for sale investments | 131.8 | 377.6 |
| Purchases of available for sale investments | -10.9 | -448.9 |
| Purchases of cost and equity method investments | (71) | 0 |
| Capital expenditures | -151.8 | -242.3 |
| Other | 0.1 | 0 |
| Net cash used in investing activities | -101.8 | -313.6 |
| Cash flows from financing activities: | ||
| Net (repayments of) proceeds from customer deposits related to long-term supply agreements | -90.2 | 138 |
| Principal payments on long-term debt | -3.2 | -2.9 |
| Excess tax benefits from stock-based compensation arrangements | 0.3 | 19 |
| Dividend to noncontrolling interest | 0 | -3.2 |
| Common stock repurchased | -15.8 | -285.5 |
| Proceeds from issuance of common stock | 0.6 | 19.8 |
| Net cash used in financing activities | -108.3 | -114.8 |
| Effect of exchange rate changes on cash and cash equivalents | 0.4 | -16.1 |
| Net (decrease) increase in cash and cash equivalents | -196.1 | 73 |
| Cash and cash equivalents at beginning of period | 988.3 | 859.3 |
| Cash and cash equivalents at end of period | 792.2 | 932.3 |
| (1) Basis of Presentation | |
| 9 Months Ended
Sep. 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 Securities and Exchange Commissions (SECs) 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 nine-month periods ended September30, 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 and impairment 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 Standards | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (2) Adoption of New Accounting Standards | (2) Adoption of New Accounting Standards On July1, 2009, MEMC adopted the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 105-10 (ASC 105-10). ASC 105-10 establishes the FASB Accounting Standards Codification (the Codification) as the source of authoritative accounting principles recognized by the FASB to be applied in the preparation of financial statements in conformity with US GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative USGAAP for SEC registrants under the Codification. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification is non-authoritative. The adoption of this accounting standard did not have a material impact on our financial statements. Noncontrolling Interests Effective January1, 2009, MEMC adopted additional guidance included in ASC 810, Consolidation, which amends prior guidance 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 guidance 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. MEMC 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 this guidance did not have a material impact on our financial statements. Fair Value Measurements and Investments Effective April1, 2009, MEMC adopted additional guidance included in ASC 825, Financial Instruments, which amends prior guidance 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 guidance also requires those disclosures in summarized financial information at interim reporting periods. Effective April1, 2009, MEMC adopted additional guidance included in ASC 320, InvestmentsDebt and Equity Securities, which amends the previous other-than-temporary impairment guidanc |
| (3) Restructuring and Impairment Costs | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (3) Restructuring and Impairment Costs | (3) Restructuring and Impairment Costs In order to better align manufacturing capabilities to projected demand, MEMC committed to workforce reductions during the second quarter of 2008 (the 2008 Plan) and again in the first and second quarters of 2009 (the 2009 Global Plan). In September 2009, MEMC committed to actions to reduce manufacturing costs by shifting manufacturing from our St. Peters, Missouri and Sherman, Texas facilities to other locations which are closer to a number of MEMCs customers (the 2009 US Plan). MEMC has provided and paid severance benefits to those terminated under the 2008 Plan and the 2009 Global Plan and will provide severance benefits to those employees who will be terminated under the 2009 US Plan. The 2008 Plan and the 2009 Global Plan were completed by September30, 2008 and June30, 2009, respectively. During the nine months ended September30, 2008, we recorded and paid severance and other employee benefits totaling $3.2 million under the 2008 Plan. 2009 Restructuring Plans AsofSeptember30,2009 In millions Accrued, January1, 2009 Year-to-Date Restructuring Charges Cash Payments Adjustments (1) Accrued, September30, 2009 Cumulative Costs Incurred TotalCosts Expectedtobe Incurred 2009 Global Plan Restructuring and impairment costs: Severance and other employee benefits $ $ 12.1 $ (11.9 ) $ (0.2 ) $ $ 11.6 $ 11.6 Outplacement costs 0.4 (0.4 ) 0.4 0.4 Settlement and curtailment loss, net (Note 12) 0.3 (0.3 ) 0.3 0.3 2009 US Plan Restructuring and impairment costs: Severance and other employee benefits 15.1 15.1 15.1 18.0 Asset move costs 31.9 Contract termination 5.8 Infrastructure costs 3.7 Outplacement costs 1.0 Total $ $ 27.9 $ (12.6 ) $ (0.2 ) $ 15.1 $ 27.4 $ 72.7 (1) Includes foreign currency related adjustments. Long-lived Asset Impairment Due to the significance of the actions announced as part of the 2009 US Plan discussed above, we performed an asset impairment analysis of our St. Peters, Missouri and Sherman, Texas long-lived manufacturing asset groups during the third quarter of 2009. In order to determine the amount of impairment, we estimated the fair value of our asset groups using discounted expected cash flows. Accordingly, we recorded asset impairment charges of $24.6 million in the third quarter of 2009 related to these asset groups. These charges were recorded in restructuring and impairment costs in our condensed consolidated statements of income (loss). |
| (4) Fair Value Measurements | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (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 September30, 2009 Assets (liabilities) in millions Level 1 Level2 Level3 Total Available for sale investments $ 220.2 $ 79.7 $ 12.0 $ 311.9 Trading investments 41.7 41.7 Auction rate securities right 2.1 2.1 Suntech warrant 17.5 17.5 Currency forward contracts - gains 0.7 0.7 Currency forward contracts - losses (3.2 ) (3.2 ) $ 217.7 $ 79.7 $ 73.3 $ 370.7 During November 2008, we accepted an offer from 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 nine months ended September30, 2009 we incurred a loss of $4.1 million related to the ARS Right and there was no gain or loss recorded during the three months ended September30, 2009. 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 estimate 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 September30, 2009 and December31, 2008 was $28.9 million and $32.2 million, respectively. The estimated fair value of that debt was $27.8 million and $31.2 million, respectively, at September30, 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 net loss of $2.5 million at September30, 2009 and a gain of $1.6 million at December31, 2008. The notional amount of our currency forward contracts was $107.5 million and $60.9 million as of September30, 2009 and December31, 2008, respectively. The following table summarizes changes in Level 3 assets measured at fair value on a recurring basis for the nine months ended September30, 2009: Fair Value Measurements Using Significant Unobservable 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 $ |
| (5) Comprehensive Income | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (5) Comprehensive Income | (5) Comprehensive Income Comprehensive income consists of the following: ThreeMonthsEnded September30, NineMonthsEnded September30, In millions 2009 2008 2009 2008 Net (loss) income $ (64.9 ) $ 183.6 $ (64.1 ) $ 320.4 Other comprehensive income (loss), net of tax: Net translation adjustment 25.2 (52.0 ) 10.8 (32.9 ) Net unrealized gain (loss) on available-for-sale securities 23.4 (16.0 ) 50.4 (19.0 ) Net unrealized actuarial loss and prior service credit (8.1 ) (8.1 ) Other comprehensive income (loss), net of tax 48.6 (76.1 ) 61.2 (60.0 ) Total comprehensive (loss) income (16.3 ) 107.5 (2.9 ) 260.4 Net loss (income) attributable to noncontrolling interests 0.3 (0.8 ) 2.9 (3.3 ) Net translation adjustment attributable to noncontrolling interests (1.5 ) 1.9 Comprehensive (loss) income attributable to MEMC stockholders $ (17.5 ) $ 106.7 $ 1.9 $ 257.1 |
| (6) Earnings (Loss) Per Share | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (6) Earnings (Loss) Per Share | (6) Earnings (Loss) Per Share For the three month periods ended September30, 2009 and 2008, basic and diluted earnings per share (EPS) were calculated as follows: ThreeMonthsEnded September30,2009 ThreeMonthsEnded September30,2008 In millions, except per share data Basic Diluted Basic Diluted EPS numerator: Net (loss) income attributable to MEMC stockholders $ (64.6 ) $ (64.6 ) $ 182.8 $ 182.8 EPS denominator: Weighted average shares outstanding 223.6 223.6 226.3 226.3 Stock options and restricted stock units 1.3 Total shares 223.6 223.6 226.3 227.6 (Loss) income per share $ (0.29 ) $ (0.29 ) $ 0.81 $ 0.80 For the nine month periods ended September30, 2009 and 2008, basic and diluted earnings per share were calculated as follows: NineMonthsEnded September30,2009 NineMonthsEnded September30,2008 In millions, except per share data Basic Diluted Basic Diluted EPS numerator: Net (loss) income attributable to MEMC stockholders $ (61.2 ) $ (61.2 ) $ 317.1 $ 317.1 EPS denominator: Weighted average shares outstanding 223.6 223.6 227.7 227.7 Stock options and restricted stock units 2.3 Total shares 223.6 223.6 227.7 230.0 (Loss) income per share $ (0.27 ) $ (0.27 ) $ 1.39 $ 1.38 For the three and nine months ended September30, 2009, all options to purchase MEMC stock and restricted stock units were excluded from the calculation of diluted EPS because the effect was antidilutive due to the net loss incurred for the periods. For the three and nine months ended September30, 2008, 3.9million 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 | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (7) Inventories | (7) Inventories Inventories consist of the following: In millions As of September30,2009 As of December31,2008 Raw materials and supplies $ 24.3 $ 18.8 Goods in process 32.8 6.4 Finished goods 52.9 56.1 $ 110.0 $ 81.3 The above inventory balances include reserves of $8.4 million and $0.7 million as of September30, 2009 and December31, 2008, respectively related to adjustments for lower of cost or market or obsolescence. We also recorded $7.6 million and $16.0 million related to the estimated shortfall to an annual purchase obligation associated with a take or pay agreement to cost of goods sold for the three and nine months ended September30, 2009, respectively. We 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 and September30, 2009. We recorded take or pay agreement shortfall charges of $9.0 million and $10.0 million for the three and nine months ended September30, 2008, but had no similar material lower of cost or market adjustments or unallocated fixed overhead costs recorded as period expenses during those periods. |
| (8) Investments | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (8) Investments | (8) Investments Equity Method Investments On June26, 2009, we entered into a binding term sheet, which was finalized into a formal joint venture agreement on August26, 2009, with Q-Cells SE (Q-Cells) for the purpose of building large scale solar power plants. Both MEMC and Q-Cells have agreed to invest up to approximately $100 million each in the venture in 2009. The joint venture company contracted with Q-Cells International during the third quarter of 2009 to develop, acquire and build the plants. Once the first solar 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. During the third quarter, we made the first two required funding payments totaling $69.0 million and expect to make the final payment in the fourth quarter of 2009. The joint venture is accounted for under the equity method of accounting. As MEMC sells wafers to Q-Cells, the revenue from those sales is recognized consistent with MEMCs revenue recognition policy, and the costs associated with those wafers is included in cost of goods sold. MEMC defers 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 the statement of income (loss) as equity in earnings of joint venture, net of tax. Investments Recorded at FairValue Short- and long-term investments measured and recorded at fair value consist of the following: As of September30, 2009 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 RecognizedLosses Greater thantwelve months Lessthan twelve months In millions Items measured at fair value on a recurring basis: Trading securities: Auction rate securities $ 43.9 $ (2.2 ) $ $ $ 41.7 $ $ $ Available for sale securities: Fixed income funds 200.0 16.5 3.7 220.2 Corporate debt securities 37.6 (9.7 ) 1.2 (1.4 ) 27.7 11.5 (1.4 ) Asset-backed securities 19.7 (2.2 ) 0.1 (0.2 ) 17.4 17.1 (0.2 ) Mortgage-backed securities 35.3 (4.6 ) (1.6 ) (2.7 ) 26.4 22.8 (2.7 ) Equity investment 12.4 |
| (9) Debt | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (9) Debt | (9) Debt We have short-term loan agreements renewable annually of approximately $18.1 million at September30, 2009, of which there were no short-term borrowings outstanding. Of the $18.1 million committed short-term loan agreements, $6.0 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 $265.2 million at September30, 2009, of which $28.9 million is outstanding. Of the $265.2 million committed long-term loan agreements, $83.8 million is unavailable because it relates to the issuance of third party letters of credit. We are currently in compliance with all financial debt covenants. We have also received a waiver of compliance certificate under our Revolving Credit Agreement with National City Bank of the Midwest (now a part of PNC Bank) that allows us to purchase equity interests in a joint venture, which purchase previously required consent under the agreement. |
| (10) Stockholders' Equity | |
| 1/1/2009 - 9/30/2009
USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (10) Stockholders' Equity | (10) Stockholders Equity The following table presents the change in total stockholders equity for the nine months ended September30, 2009. In millions MEMCStockholders Equity NoncontrollingInterest Total Balance, January1, 2009 $ 2,082.0 $ 34.8 $ 2,116.8 Net loss (61.2 ) (2.9 ) (64.1 ) Other comprehensive income (loss), net of tax 63.1 (1.9 ) 61.2 Stock plans, net 25.8 25.8 Common stock repurchased (15.8 ) (15.8 ) Balance, September30, 2009 $ 2,093.9 $ 30.0 $ 2,123.9 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 September30, 2009, there were 7.5million shares authorized for future grant under these plans. The following table presents information regarding outstanding stock options as of September30, 2009 and changes during the nine months then ended with regard to stock options: Shares Weighted- Average ExercisePrice Aggregate IntrinsicValue (in millions) Weighted- Average Remaining Contractual Life Outstanding at January1, 2009 5,303,783 $ 40.29 Granted 4,817,750 13.99 Exercised (80,146 ) 7.21 Forfeited (346,043 ) 32.23 Expired (309,247 ) 36.97 Outstanding at September30, 2009 9,386,097 27.48 $ 18.0 8years Options exercisable at September30, 2009 2,556,424 30.58 $ 4.8 6years 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 third 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 September30, 2009. This amount changes based on the fair market value of our stock. Total intrinsic value of options exercised for the nine months ended September30, 2009 and 2008 was $0.8 million and $72.6 million, respectively. For the nine months ended September30, 2009 and 2008, cash received from option exercises under option plans was $0.6 million and $19.8 million, respectively and the actual tax benefit realized for the tax deductions from option exercises was $0.4 million and $22.7 million, 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 exercis |
| (11) Income Taxes | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (11) Income Taxes | (11) Income Taxes During the three months ended September30, 2009, we recorded an income tax benefit of $6.3 million and an effective tax rate of 9.2%, compared to an income tax expense of $38.1 million and an effective tax rate of 17.2% for the three months ended September30, 2008. The income tax benefit for the 2009 third quarter primarily resulted from tax losses in higher rate jurisdictions offset by taxable income in lower rate jurisdictions. During the three months ended June30, 2009, we determined that the undistributed earnings of one of our foreign wholly-owned subsidiaries would be remitted to the United States 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 $2.2 million in the nine months ended September, 30 2009. As of September30, 2009, federal and state income taxes that have not been provided on accumulated but undistributed earnings of foreign subsidiaries were approximately $851.7 million because such earnings have been permanently reinvested in the business. 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 examination by the Internal Revenue Service (IRS) for the 2006 and 2007 tax years. During the quarter ended September30, 2009, we received proposed adjustments from the IRS related to various cost allocations and taxable income adjustments attributable to our foreign operations during the periods under audit. We disagree with these adjustments and intend to vigorously contest them. We believe it is reasonably possible that the examination could be completed within the next twelve months. The amount of adjustment, if any, and the timing of such adjustment, however, are not reasonably estimable at this time. We believe our tax positions are in compliance with applicable tax laws and regulations. We routinely review our estimate for our uncertain tax positions and during the quarter ended September30, 2009 increased the unrecognized benefit by $19.2 million, including amounts related to interest and penalties for previously identified issues. There is a risk that the amounts ultimately resolved could be materially different from the amounts previously included or reserved for in our income tax liabilities and could therefore have a material impact on our tax provision, net income, tax liabilities and cash flows in future periods. During the nine months ended September30, 2009, we recorded additional tax expense of approximately $3.4 million primarily related to interest and penalties assessed by taxing authorities relate |
| (12) Benefit Plans | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (12) Benefit Plans | (12) Benefit Plans Net periodic postretirement benefit cost consists of the following: ThreeMonthsEnded September30, 2009 ThreeMonthsEnded September30, 2008 NineMonthsEnded September30, 2009 NineMonthsEnded September30, 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 $ $ 2.4 $ $ 2.2 $ Interest Cost 2.5 0.3 2.5 0.4 7.5 1.1 7.6 1.2 Expected return on plan assets (3.3 ) (3.2 ) (9.9 ) (8.6 ) Amortization of prior service costs and net actuarial loss/(gain) 1.2 (0.5 ) 0.2 (0.3 ) 3.8 (1.7 ) 0.4 (0.9 ) Settlement and curtailment loss, net 0.3 Net periodic postretirement benefit cost $ 1.2 $ (0.2 ) $ 0.2 $ 0.1 $ 4.1 $ (0.6 ) $ 1.6 $ 0.3 The settlement and curtailment loss, net is related to the restructuring charges discussed in Note 3 above. |
| (13) Long-term Customer Contracts | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (13) Long-term Customer Contracts | (13) Long-term Customer Contracts During February 2009, we amended two of our long-term solar wafer supply agreements. Under those 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. We further amended these agreements in the third quarter of 2009 providing for an additional price reduction and volume increase for the second half of 2009. The subsequent amendments also provide a deferral mechanism for a potential 2009 purchase shortfall by the customers (from the increased volume commitment), by allowing the customers to make up the purchase shortfall in subsequent years. Such deferred volume amounts will be added to the customers minimum purchase requirements for future contract years. There was no change in the amount of collateral currently required in the form of deposits. Due to the amendment with one of these customers, approximately $11.6 million of previously refundable deposits are no longer refundable and have been reclassified from other long-term liabilities to deferred revenue and will be amortized over the remaining term of the contract as an operating income item. The constructive receipt of the non-refundable deposit and corresponding reduction in refundable deposits has been reflected as working capital and other operating cash inflows and a decrease in customer deposits in financing cash flows in the condensed consolidated statement of cash flows for the nine months ended September30, 2009. Also in connection with one of the amendments, as additional consideration to MEMC, the customer agreed to sell to us an equity investment in shares of an unrelated entity at its cost of approximately $5 million, subject to obtaining required regulatory approvals for such transfer. It is expected that the shares will be purchased in the fourth quarter of 2009. A third solar wafer customer has not made a scheduled refundable capacity reservation deposit that was due under their agreement in early January 2009. This customer has made limited purchases under the agreement in 2009 and did not meet the minimum annual purchase requirements as of August 31, 2009. The Company is in discussions with this customer regarding the agreement. 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. Discovery in this suit has commenced. During the quarter ended June30, 2009, MEMC applied approximately $44.1 million of refundable security deposits against outstanding accounts receivable balances in accordance with the terms of the long-term customer contracts and instructed the customers to replenish the deposits. The application of the deposits against accounts receivable has been reflected as working capital and other operating cash inflows and a decrease in customer deposits in fina |
| (14) Commitments and Contingencies | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (14) Commitments and Contingencies | (14) Commitments and Contingencies On June26, 2009, we entered into a binding term sheet, which was finalized into a formal joint venture agreement on August26, 2009, with Q-Cells, for the purpose of building large scale solar power plants. See further information regarding the Q-Cells investment and related commitments in Note 8 above. 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 September30, 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. The final complaint filed by Plaintiff alleged that MEMC Pasadena failed to supply polysilicon powder to the Plaintiff in 2006 and 2007 under an alleged three-year supply agreement. MEMC has always maintained that no such long term supply agreement ever existed. The case was tried before a jury and on July31, 2009, the jury returned a verdict in favor of BP Solar, awarding damages of $8.8 million. Both MEMC and BP Solar have appealed. MEMC and MEMC Pasadena continue to believe that the lawsuit is without merit and the Company remains committed to a vigorous defense of the case at the appellate level. Due to the inherent uncertainties of litigation, MEMC cannot predict the outcome of this appeal. An unfavorable outcome on appeal would result in MEMC having to pay BP Solar the damages originally found by the jury, plus interest. MEMC accrued the full amount of damages of the verdict of $8.8 million in marketing and administration expense and accrued expenses and $3.7 million of income tax benefit, resulting in a net expense of $5.1 million, during the quarter ended June30, 2009. S.O.I.TEC Silicon on Insulator Technologies S.A. vs. MEMC Electronic Materials, Inc. On May19, 2008, Soitec and Commissariat A LEnergie Atomique (CEA) filed a complaint against MEMC in the U.S. District Court for the District of Delaware (Civil Action No.08-292) alleging infringement, including willful infringement, by MEMC of three U.S. patents related to silicon-on-insulator (SOI) technology, and requested damages and an injunction preventing further infringement of the three patents listed in Soitecs complaint. Soitec and CEA filed an amended complaint on July21, 2009, adding a fourth, rel |
| (15) Accounting Standards Updates Not Yet Effective | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (15) Accounting Standards Updates Not Yet Effective | (15) Accounting Standards Updates Not Yet Effective In December 2008, the FASB issued additional guidance included in ASC 715, CompensationRetirement 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. It is effective for fiscal years ending after December15, 2009, with earlier application permitted. Upon initial application, the provisions of this guidance are not required for earlier periods that are presented for comparative purposes. We are currently evaluating the disclosure requirements of this new guidance, but we believe its adoption will not have an impact on our consolidated results of operations and financial condition. In June 2009, the FASB issued Statement of Financial Accounting Standards No.166, Accounting for Transfers of Financial Assets (SFAS 166), which has not yet been incorporated into the Codification., SFAS 166 removes the concept of a qualifying special-purpose entity from previous guidance. This guidance also clarifies the requirements for isolation and limitations on portions of financial assets that are eligible for sale accounting. It is effective for fiscal years beginning after November15, 2009. We are currently evaluating the impact of adopting this guidance on our consolidated results of operations and financial condition. In June 2009, the FASB issued SFAS No.167, Amendments to FASB Interpretation No.46R (SFAS 167), which has not yet been incorporated in the Codification. SFAS 167 amends previous guidance to require an analysis to determine whether a variable interest gives a company a controlling financial interest in a variable interest entity. An ongoing reassessment of financial responsibility is required, including interests in entities formed prior to the effective date of this guidance, and eliminates the quantitative approach previously required for determining whether a company is the primary beneficiary. It is effective for fiscal years beginning after November15, 2009. We are currently evaluating the impact of adopting this guidance on our consolidated results of operations and financial condition. On September23, 2009, the FASB ratified Emerging Issues Task Force Issue No.08-1, Revenue Arrangements with Multiple Deliverables (EITF 08-1). EITF 08-1 updates the current guidance pertaining to multiple-element revenue arrangements included in ASC Subtopic 605-25, which originated primarily from EITF 00-21, also titled Revenue Arrangements with Multiple Deliverables. EITF 08-1 will be effective for annual reporting periods beginning January1, 2011 for calendar-year entities. We are currently evaluating the impact of EITF 08-1 on our consolidated results of operations and financial condition. |
| (16) Subsequent Event | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| (16) Subsequent Event | (16) Subsequent Event On October22, 2009, MEMC reached a definitive merger agreement to acquire privately held Sun Edison LLC (Sun Edison), a developer of solar power projects. The agreement calls for $200 million to be paid at closing to SunEdison security holders, which will be paid 70% in cash and 30% in MEMC stock. The agreement also includes an earn-out provision, should SunEdison meet certain performance targets in 2010, of up to an additional $89 million, consisting of cash and stock. In addition, the agreement calls for employee retention payments of $17 million in cash at closing, the payment of certain transaction expenses and the assumption of a bridge note and revolvers estimated to be approximately $70 million at the time of closing. The acquisition is expected to close by the end of 2009, subject to customary closing conditions and receipt of regulatory approvals. |
| Document Information | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Document Information [Text Block] | |
| Document Type | 10-Q |
| Amendment Flag | false |
| Document Period End Date | 2009-09-30 |
| Entity Information (USD $) | ||
| 9 Months Ended
Sep. 30, 2009 | Oct. 30, 2009
| |
| 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 Filer Category | Large Accelerated Filer | |
| Entity Common Stock, Shares Outstanding | 223,561,522 |
