Sunedison (SUNEQ) 10-Q 10 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	May. 03, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
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		227,415,836

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Net sales	437.7	$214
Cost of goods sold	378.4	194.3
Gross profit	59.3	19.7
Operating expenses:
Marketing and administration	62.2	29.8
Research and development	11.1	9.6
Restructuring costs	1.3	6.7
Operating loss	-15.3	-26.4
Non-operating (income) expense:
Interest expense	12.1	0.3
Interest income	-2.3	-11.7
Decline in fair value of warrant	5.3	0.1
Other, net	0.6	2.6
Total non-operating (income) expense	15.7	-8.7
Loss before income tax benefit and equity in earnings of joint venture	(31)	-17.7
Income tax benefit	-14.6	-18.9
(Loss) income before equity in earnings of joint venture	-16.4	1.2
Equity in earnings of joint venture, net of tax	7.3
Net (loss) income	-9.1	1.2
Net (income) loss attributable to noncontrolling interests	-0.5	0.8
Net (loss) income attributable to MEMC stockholders	-9.6	$2
Basic (loss) income per share	-0.04	0.01
Diluted (loss) income per share	-0.04	0.01
Weighted-average shares used in computing basic (loss) income per share	226.8	223.6
Weighted-average shares used in computing diluted (loss) income per share	226.8	224

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Current assets:
Cash and cash equivalents	477.9	632.7
Restricted cash	42.8	37.4
Short-term investments	171.7	85.9
Accounts receivable, less allowance for doubtful accounts of $10.0 in 2010 and 2009	265.8	173.3
Inventories	188.3	160.8
Income taxes receivable	72.6	72.5
Prepaid and other current assets	91.7	87
Total current assets	1310.8	1249.6
Investments	209.6	297.6
Property, plant and equipment, net of accumulated depreciation of $577.5 and $551.7 in 2010 and 2009, respectively	1487.3	1460.7
Deferred tax assets, net	103.1	95.3
Customer warrant	13.9	19.2
Restricted cash	21.8	21
Other assets	88.8	91.1
Goodwill	285.3	285.3
Intangible assets, net	45.1	46.7
Total assets	3565.7	3566.5
Current liabilities:
Current portion of long-term debt and capital leases	42.7	32.2
Accounts payable	230	219.3
Accrued liabilities	86	106.8
Contingent consideration related to acquisition	78.5
Accrued wages and salaries	35.8	39.2
Customer deposits	59.7	83.6
Income taxes payable	21.3	28
Total current liabilities	554	509.1
Long-term debt and capital leases, less current portion	401.2	384.4
Pension and post-employment liabilities	46.7	46.6
Deferred revenue	116.9	106.3
Other liabilities	233.8	313.3
Total liabilities	1352.6	1359.7
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 50.0 shares authorized, none issued and outstanding at 2010 and 2009
Common stock, $.01 par value, 300.0 shares authorized, 237.2 shares issued at 2010 and 2009	2.4	2.4
Additional paid-in capital	517.8	507.4
Retained earnings	2069.5	2079.1
Accumulated other comprehensive income	31.6	33
Treasury stock, 9.8 shares in 2010 and 2009, respectively	-453.4	-453.3
Total MEMC stockholders' equity	2167.9	2168.6
Noncontrolling interests	45.2	38.2
Total stockholders' equity	2213.1	2206.8
Total liabilities and stockholders' equity	3565.7	3566.5

1_CONDENSED CONSOLIDATED BALANC

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Per Share data	Mar. 31, 2010	Dec. 31, 2009
Accounts receivable, allowance for doubtful accounts	$10	$10
Property, plant and equipment, accumulated depreciation	577.5	551.7
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, shares issued	237.2	237.2
Treasury stock, shares	9.8	9.8

2_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash flows from operating activities:
Net (loss) income	-9.1	1.2
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	37.5	28.4
Stock-based compensation	10.9	9.2
Decline in fair value of warrant	5.3	0.1
Change in accounts receivable	-94.1	23.5
Working capital and other	-60.6	(77)
Net cash used in operating activities	-110.1	-14.6
Cash flows from investing activities:
Proceeds from sale and maturities of investments	8	37.7
Capital expenditures	-46.2	-53.2
Construction of solar energy systems	-44.9
Restricted cash	-4.4
Other	6.1	0.1
Net cash used in investing activities	-81.4	-15.4
Cash flows from financing activities:
Net repayments of customer deposits related to long-term supply agreements	-27.6	(36)
Principal payments on long-term debt	-0.3
Proceeds from financing obligations	72.8
Repayments of financing and capital lease obligations	-3.6
Common stock repurchased		-15.8
Proceeds from issuance of common stock		0.1
Cash contributions from noncontrolling interests	5.4
Debt financing fees	-6.6
Net cash provided by (used in) financing activities	40.1	-51.7
Effect of exchange rate changes on cash and cash equivalents	-3.4	-8.2
Net decrease in cash and cash equivalents	-154.8	-89.9
Cash and cash equivalents at beginning of period	632.7	988.3
Cash and cash equivalents at end of period	477.9	898.4
Supplemental schedule of non-cash financing activity:
Debt transferred to and assumed by buyer upon sale of solar energy systems	-43.3

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
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 unaudited condensed consolidated financial statements in accordance with the Securities and Exchange Commissions (SEC) 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, 2009, which contains MEMCs audited financial statements for such year. Operating results for the three-month period ended March31, 2010 are not necessarily indicative of the results that may be expected for the year ending December31, 2010. 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, leases, accrued liabilities, employee benefits, derivatives, stock based compensation, income taxes, the fair value of assets acquired and liabilities assumed in connection with business combinations, goodwill and asset valuation allowances, among others. These estimates and assumptions are based on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. To the extent there are material differences between the estimates and actual results, our future results of operations would be affected. On November20, 2009, we completed the acquisition of Sun Edison LLC (SunEdison),a solar energy services provider that integrates the design, installation, monitoring and financing of solar energy systems in order to provide a comprehensive solar energy services solution. Until the acquisition of SunEdison, MEMC was engaged in one reportable industry segmentthe design, manufacture and sale of silicon waferswhich was conducted as our Materials Business. From the time of the SunEdison acquisition until the end of 2009, MEMC was engaged in two reportable segments, Materials Business and Solar Energy Business (d/b/a SunEdison). Effective January1, 2010, we are now engaged in three reportable segments: Semiconductor Materials, Solar Materials (both include the historical operations of MEMC) and Solar Energy (consists solely of SunEdison). New Accounting Standards In June 2009, the Financial Accounting Standards Board (FASB) issued an accounting standards update included in Accounting Standards Codification (ASC) 860, Transfers and Servicing, which removes the concept of a qualifying special-purpose

Restructuring Costs

Restructuring Costs
	3 Months Ended Mar. 31, 2010
Restructuring Costs	(2) Restructuring Costs In order to better align manufacturing capabilities to projected demand, MEMC committed to workforce reductions during 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 in the Asia Pacific region (the 2009 U.S. Plan). MEMC has provided and paid severance benefits to those terminated under the 2009 Global Plan and will provide severance benefits to those employees who will be terminated under the 2009 U.S. Plan. The 2009 Global Plan was completed by June30, 2009. We expect the 2009 U.S. Plan to be completed in 2011. In the three months ended March31, 2010, we recorded restructuring expenses of $1.3 million primarily for employee benefits and equipment moving costs related to the 2009 U.S. Plan. In the three months ended March31, 2009, we recorded restructuring expenses for the 2009 Global Plan of $6.7 million related to one-time termination benefits, including $0.5 million of outplacement costs and a $0.3 million expense for one of our defined benefit pension plans. All restructuring costs were recorded to the Semiconductor Materials segment. Details of expenses related to the 2009 U.S. Plan are set out in the following table: Accrued, December31, 2009 Year-to-Date Restructuring Charges Cash Payments Accrued, March31, 2010 AsofMarch 31, 2010 Cumulative Costs Incurred TotalCosts Expectedtobe Incurred In millions 2009 U.S. Plan Severance and other employee benefits $ 15.2 $ 0.7 $ $ 15.9 $ 16.8 $ 18.0 Asset move costs 0.6 (0.6 ) 0.6 20.3 Contract termination 5.8 Infrastructure costs 4.0 Outplacement costs 1.0 Total $ 15.2 $ 1.3 $ (0.6 ) $ 15.9 $ 17.4 $ 49.1

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Fair Value Measurements	(3) 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 unaudited condensed consolidated balance sheets: As of March31, 2010 As of December31, 2009 Assets (liabilities) in millions Level1 Level2 Level3 Total Level1 Level2 Level3 Total Available-for-sale investments $ 115.7 $ 96.7 $ 6.9 $ 219.3 $ 110.8 $ 93.3 $ 11.6 $ 215.7 Trading investments 34.5 34.5 38.4 38.4 Auction rate securities right 1.8 1.8 2.0 2.0 Suntech warrant 13.9 13.9 19.2 19.2 Interest rate swaps 1.4 1.4 0.8 0.8 Currency forward contracts 3.7 3.7 3.3 3.3 $ 119.4 $ 98.1 $ 57.1 $ 274.6 $ 114.1 $ 94.1 $ 71.2 $ 279.4 The carrying amount of our outstanding long-term debt at March31, 2010 and December31, 2009 was $300.9 million and $273.5 million, respectively. The estimated fair value of that debt was $299.8 million and $272.3 million, respectively, at March31, 2010 and December31, 2009. 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 $3.7 million and $3.3 million at March31, 2010 and December31, 2009, respectively. The notional amount of our currency forward contracts was $82.2 million and $113.9 million as of March31, 2010 and December31, 2009, respectively. Refer to Note 4 for additional information pertaining to our derivative instruments. There were no significant transfers in to or out of Level 1 and Level 2 assets during the three months ended March 31, 2010. The following table summarizes changes in Level 3 assets measured at fair value on a recurring basis for the three months ended March31, 2009 and 2010: FairValueMeasurementsUsingSignificantUnobservableInputs (Level3) 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 ) 5.8 (5.0 ) (0.1 ) (1.6 ) Included in other comprehensive income, net (2.2 ) (2.2 ) Sales, redemptions and maturities (2.2 ) (4.0 ) (6.2 ) Transfers in to Level 3, net 5.6 5.6 Balance at March31, 2009 $ 21.7 $ 45.9 $ 1.2 $ 13.7 $ 82.5 Balance at December31, 2009 $ 11.6 $ 38.4 $ 2.0 $ 19.2

Derivatives and Hedging Instrum

Derivatives and Hedging Instruments
	3 Months Ended Mar. 31, 2010
Derivatives and Hedging Instruments	(4) Derivatives and Hedging Instruments MEMCs derivatives and hedging activities consist of: Assets (Liabilities) Fair Value In millions Balance Sheet Location As of March31, 2010 As of December31, 2009 Derivatives designated as hedging: Interest rate swaps Accrued liabilities $ $ (1.2 ) Interest rate swaps Prepaid and other current assets $ 1.4 $ 2.0 Interest rate swaps Accumulated other comprehensive income $ (2.5 ) $ (1.8 ) Net investment hedge Prepaid and other current assets $ 3.5 $ 3.6 Net investment hedge Accumulated other comprehensive income $ (3.5 ) $ (3.6 ) Derivatives not designated as hedging: Suntech warrant Customer warrant $ 13.9 $ 19.2 Currency forward contracts Prepaid and other current assets $ 0.7 $ 0.8 Currency forward contracts Accrued liabilities $ (0.5 ) $ (4.1 ) (Gains) Losses In millions Statement of Operations Location ThreeMonthsEnded March31, 2010 ThreeMonthsEnded March31, 2009 Derivatives not designated as hedging: Suntech warrant Decline in fair value of warrant $ 5.3 $ 0.1 Currency forward contracts Other, net $ (1.0 ) $ (2.0 ) To mitigate financial market risks of foreign currency exchange rates, we utilize currency forward contracts. We do not use derivative financial instruments for speculative or trading purposes. We generally hedge transactional currency risks with currency forward contracts. Gains and losses on these foreign currency exposures are generally offset by corresponding losses and gains on the related hedging instruments, reducing the net exposure to MEMC. A substantial portion of our revenue and capital spending is transacted in U.S. Dollars. However, we do enter into transactions in other currencies, primarily the Euro, the Japanese Yen, and certain other Asian currencies. To protect against reductions in value and volatility of future cash flows caused by changes in foreign exchange rates, we have established transaction-based hedging programs. Our hedging programs reduce, but do not always eliminate, the impact of foreign currency exchange rate movements. At any point in time we may have outstanding contracts with several major financial institutions for these hedging transactions. Our maximum credit risk loss with these institutions is limited to any gain on our outstanding contracts. We are party to three interest rate swap instruments with a notional amount of approximately $45.7 million at March31, 2010 that are accounted for using hedge accounting. These instruments are used to hedge floating rate debt and are accounted for as cash flow hedges. Under the swap agreements, MEMC pays the fixed rate and the counterparties to the agreements pay MEMC a floating interest rate. The counterparties to these agreements are financial institutions. The estimated fair value recorded to the balance sheet as provided in the table above is an estimate of the net amount that MEMC would pay on

Comprehensive Loss

Comprehensive Loss
	3 Months Ended Mar. 31, 2010
Comprehensive Loss	(5) Comprehensive Loss Comprehensive loss consists of the following: In millions ThreeMonthsEnded March31, 2010 ThreeMonthsEnded March31, 2009 Net (loss) income $ (9.1 ) $ 1.2 Other comprehensive (loss) income, net of tax: Net translation adjustment (10.5 ) (32.9 ) Net unrealized gain on available-for-sale securities 9.5 1.8 Gain on mark-to-market for cash flow hedges 0.7 Other comprehensive (loss) income, net of tax (0.3 ) (31.1 ) Total comprehensive loss (9.4 ) (29.9 ) Net (income) loss attributable to noncontrolling interests (0.5 ) 0.8 Net translation adjustment attributable to noncontrolling interests (1.1 ) Comprehensive loss attributable to MEMC stockholders $ (11.0 ) $ (29.1 )

Earnings

Earnings (Loss) Per Share
	3 Months Ended Mar. 31, 2010
Earnings (Loss) Per Share	6) Earnings (Loss) Per Share For the three month periods ended March31, 2010 and 2009, basic and diluted earnings per share (EPS) were calculated as follows: ThreeMonthsEnded March31, 2010 ThreeMonthsEnded March31, 2009 In millions, except per share data Basic Diluted Basic Diluted EPS numerator: Net (loss) income attributable to MEMC stockholders $ (9.6 ) $ (9.6 ) $ 2.0 $ 2.0 EPS denominator: Weighted average shares outstanding 226.8 226.8 223.6 223.6 Effect of dilutive stock options and restricted stock units 0.4 Total shares 226.8 226.8 223.6 224.0 Earnings (loss) per share $ (0.04 ) $ (0.04 ) $ 0.01 $ 0.01 Contingent consideration will be paid to the former SunEdison unit holders if certain operational criteria are met from January1, 2010 through December31, 2010. In order for the full consideration to be paid, the surviving SunEdison entity would have to install 150 megawatts of solar photovoltaic projects in 2010 and achieve certain profitability thresholds. This would entitle the former SunEdison unit holders to an additional $89.0 million of consideration in a combination of cash and MEMC common stock. If SunEdison completes less than 80 megawatts of solar photovoltaic projects, no contingent consideration will be paid. If 80 megawatts or more are completed, the SunEdison unit holders will receive between $25.0 million and $89.0 million of cash and MEMC common stock, based on the terms of the acquisition agreement. As of March31, 2010, we have accrued approximately $78.5 million based on the estimated fair value of this contingency. Approximately $6.9 million of the share consideration due to SunEdisons former unit holders is currently held in escrow pursuant to the terms of the acquisition agreement. For the three months ended March31, 2010, all options to purchase MEMC stock and all restricted stock units were excluded from the calculation of diluted EPS because the effect was antidilutive due to the net loss incurred for the period. For the three months ended March31, 2009, restricted stock units and options to purchase 9.1million shares of MEMC stock were excluded from the calculation of diluted EPS because the effect was antidilutive.

Inventories

Inventories
	3 Months Ended Mar. 31, 2010
Inventories	(7) Inventories Inventories consist of the following: In millions As of March31,2010 As of December31,2009 Raw materials and supplies $ 27.5 $ 47.2 Goods and work in process 112.0 55.4 Finished goods 48.8 58.2 $ 188.3 $ 160.8 SunEdison inventories of $65.7 and $20.3 million at March31, 2010 and December31, 2009, respectively, consist of raw materials and supplies and work in process related to the construction of solar energy systems intended for sale. In the event the solar energy system is not sold and will be held and used in the foreseeable future, it will be capitalized to property, plant and equipment.

Investments

Investments
	3 Months Ended Mar. 31, 2010
Investments	(8) Investments Equity Method Investments In the fourth quarter of 2009, our equity method joint venture with Q-Cells SE (Q-Cells) completed the construction of a solar power plant and executed a contract to sell it to a third party. This contract resulted in the joint venture recognizing an impairment on the plant assets. MEMCs share of the impairment was approximately $3.0 million in the fourth quarter of 2009 with an additional $1.5 million recognized in the first quarter of 2010 when concessions were made to the pre-negotiated sales price. Also in the first quarter of 2010, MEMC recognized its pro rata share of the net profit previously deferred for solar wafers sold to Q-Cells International of $8.8 million, which is recorded in the statement of operations as equity in earnings of joint venture, net of tax. MEMC has classified this joint venture as current because MEMC expects the proceeds from the sale of the solar power plant to be returned to the joint venture parties within the next twelve months. Investments Recorded at Fair Value Short- and long-term investments measured and recorded at fair value on a recurring basis consist of the following: In millions Cost GrossUnrealized Gains/(Losses) and Other-than- temporary Impairments Recorded in Earnings(1) Other-than- temporary Impairments inAccumulated Other Comprehensive Income(Loss)(2) Unrealized Gains/(Losses) in Other Comprehensive Income FairValue FairValueof Investmentsin UnrealizedLoss Positions withno Recognized Losses UnrealizedLosseson Investments in Unrealized Loss Positions with no RecognizedLosses Greaterthan twelvemonths Less than twelve months As of March31, 2010: Trading securities: Auction rate securities $ 36.3 $ (1.8 ) $ $ $ 34.5 $ $ $ Available-for-sale securities: Fixed income funds 97.5 9.5 8.7 115.7 Corporate debt securities 27.7 (9.7 ) 1.2 (0.5 ) 18.7 5.0 (0.5 ) Asset-backed securities 16.8 (2.2 ) 0.1 (0.1 ) 14.6 14.4 (0.1 ) Mortgage-backed securities 30.7 (4.6 ) (1.6 ) (0.5 ) 24.0 20.3 (0.5 ) Equity investment securities 12.4 33.9 46.3 185.1 (7.0 ) (0.3 ) 41.5 219.3 39.7 (1.1 ) Total $ 221.4 $ (8.8 ) $ (0.3 ) $ 41.5 $ 253.8 $ 39.7 $ (1.1 ) $ As of December31, 2009: Trading securities: Auction rate securities $ 40.5 $ (2.1 ) $ $ $ 38.4 $ $ $ Available-for-sale securities:

Intangible Assets

Intangible Assets
	3 Months Ended Mar. 31, 2010
Intangible Assets	(9) Intangible Assets Intangible assets at March31, 2010 and December31, 2009 are as follows: Weighted Average Amortization Period Gross Carrying Amount AccumulatedAmortization Net Carrying Amount Dollars in millions March31, 2010 December31, 2009 March31, 2010 December31, 2009 March31, 2010 December31, 2009 Amortizable intangible assets: Favorable energy credits 7 $ 14.2 $ 14.2 $ (1.0 ) $ (0.3 ) $ 13.2 $ 13.9 Customer relationships 7 4.7 4.7 (0.2 ) 4.5 4.7 Trade name 15 4.0 4.0 (0.1 ) 3.9 4.0 Internally developed software 3 1.3 1.3 (0.2 ) (0.1 ) 1.1 1.2 Purchased software 6 27.2 27.4 (22.8 ) (22.5 ) 4.4 4.9 Other intangible assets: Power plant development arrangements 18.0 18.0 18.0 18.0 Total intangible assets $ 69.4 $ 69.6 $ (24.3 ) $ (22.9 ) $ 45.1 $ 46.7

Debt and Capital Lease Obligati

Debt and Capital Lease Obligations
	3 Months Ended Mar. 31, 2010
Debt and Capital Lease Obligations	(10) Debt and Capital Lease Obligations Long-term debt and capital leases outstanding consist of the following: AsofMarch31, 2010 AsofDecember31, 2009 In millions Solar energy systems: Capital leases, bearing interest at 3.00% $ 140.8 $ 140.9 Finance obligations, bearing interest from 3.00% to 11.11% 272.9 245.1 Long-term notes 25.4 25.4 Capital leases for equipment and other debt 4.8 5.2 Total 443.9 416.6 Less current portion 42.7 32.2 Long-term debt $ 401.2 $ 384.4 We have non-solar energy system short-term committed financing arrangements renewable annually of approximately $20.7 million at March31, 2010, of which there were no short-term borrowings outstanding at March31, 2010. Of the $20.7 million committed short-term financing arrangements, $9.8 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 non-solar energy system long-term committed financing arrangements of approximately $320.8 million at March31, 2010, of which $42.1 million is outstanding. Of the $320.8 million committed long-term financing arrangements, $66.7 million is unavailable because it relates to the issuance of third party letters of credit. Our solar energy systems for which we have capital lease and finance obligations are included in separate legal entities. The capital lease and finance obligations have recourse to those separate legal entities but limited or no recourse to the MEMC parent or SunEdison parent under the terms of the applicable agreements. The schedule of principal payments on long term debt is as follows: In millions AsofMarch31,2010 April 1, 2010 through December 31, 2010 $ 26.1 2011 14.2 2012 13.3 2013 13.1 2014 11.8 Thereafter 222.4 Total $ 300.9

Stockholders' Equity

Stockholders' Equity
	3 Months Ended Mar. 31, 2010
Stockholders' Equity	(11) Stockholders Equity The following table presents the change in total stockholders equity for the three months ended March31, 2010. In millions MEMCStockholders Equity NoncontrollingInterest Total Balance, January1, 2010 $ 2,168.6 $ 38.2 $ 2,206.8 Net (loss) income (9.6 ) 0.5 (9.1 ) Other comprehensive (loss) income, net of tax (1.4 ) 1.1 (0.3 ) Stock plans, net 10.3 10.3 Contributions from noncontrolling interest 5.4 5.4 Balance, March31, 2010 $ 2,167.9 $ 45.2 $ 2,213.1 In the first quarter of 2010 Banco Santander (Santander) acquired a 50% ownership in certain SunEdison project entities which SunEdison will consolidate. Santander contributed $5.4 million of equity and $12.0 million in the form of a note payable. Santanders interest is expected to be eliminated within the next twelve months upon the eventual sale of the project. 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 March31, 2010, there were 5.8million shares authorized for future grant under these plans. On April20, 2010, MEMCs stockholders approved a new 2010 Equity Incentive Plan, which has 15.0million shares authorized and available for future grants. The following table presents information regarding outstanding stock options as of March31, 2010 and changes during the three months then ended with regard to stock options: Shares Weighted- Average ExercisePrice Aggregate IntrinsicValue (in millions) Weighted- Average Remaining Contractual Life Outstanding at December31, 2009 10,382,235 $ 25.75 Granted 560,997 13.45 Exercised (3,625 ) 10.67 Forfeited (57,165 ) 21.84 Expired (70,509 ) 41.95 Outstanding at March31, 2010 10,811,933 $ 25.01 $ 14.2 8Years Options exercisable at March31, 2010 3,696,715 $ 29.11 $ 5.2 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 first quarter of 2010 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 March31, 2010. This amount changes based on the fair market value of our stock. For the three months ended March31, 2010, the total intrinsic value of options exercised, the cash received from option exercises under our option plans and the actual tax benefit realized for the tax deductions from option exercises were all less than $0.1 million. The total intrinsic value of options exercised for the three months ended March31, 2009 was $0.1 million. For the three months ended March31, 2009, cash received fro

Income Taxes

Income Taxes
	3 Months Ended Mar. 31, 2010
Income Taxes	(12) Income Taxes We are currently under a tax examination by the Internal Revenue Service for the 2006 and 2007 tax years. It is reasonably possible that the examination could be completed within the next twelve months; however, the results of the examination and any potential settlement are not able to be determined as of March 31, 2010. There is 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 three months ended March31, 2010, we recorded an income tax benefit of $14.6 million and an effective tax rate of 47.1%. The income tax benefit for the first quarter of 2010 is primarily related to a discrete tax benefit of $5.4 million associated with a planned remittance of the undistributed earnings of one of our foreign wholly owned subsidiaries to the U.S. in the foreseeable future and a discrete benefit of $3.1 million associated with the reversal of a deferred tax asset valuation allowance for foreign net operating losses of SunEdison that can be used to offset current earnings. The remaining income tax benefit for the first quarter of 2010 is primarily attributed to a taxable loss in the U.S. offset by taxable income in lower rate jurisdictions. We recorded a tax benefit on the U.S. tax loss because there is sufficient taxable income in the allowable carry back period to absorb the loss.

Benefit Plans

Benefit Plans
	3 Months Ended Mar. 31, 2010
Benefit Plans	(13) Benefit Plans Net periodic postretirement benefit cost consists of the following: ThreeMonthsEnded March31, 2010 ThreeMonthsEnded March31, 2009 In millions Pension Plans HealthCareand OtherPlans Pension Plans HealthCareand Other Plans Service cost $ 0.6 $ $ 0.8 $ Interest cost 2.4 0.4 2.5 0.4 Expected return on plan assets (3.6 ) (3.3 ) Net actuarial loss/(gain) and amortization of prior service costs 2.2 (0.6 ) 1.3 (0.6 ) Settlement and curtailment loss, net 0.3 Net periodic postretirement benefit cost $ 1.6 $ (0.2 ) $ 1.6 $ (0.2 ) The settlement and curtailment loss, net is related to the restructuring charges discussed in Note 2 above.

Long-term Customer Contracts

Long-term Customer Contracts
	3 Months Ended Mar. 31, 2010
Long-term Customer Contracts	(14) Long-term Customer Contracts In January 2010, we reached an out of court settlement of a lawsuit filed in April 2009 related to our long-term solar wafer supply agreement with Conergy AG (Conergy). At the same time, we amended this agreement with Conergy, which amendment included a significant reduction in the minimum quantity of wafers that Conergy must purchase over the remaining eight years of the agreement, as well as a minimum market share commitment should Conergys demand exceed the reduced quantities. The amendment also modifies the pricing terms to be based on market rates similar to other MEMC long-term solar wafer supply agreements. The amendment includes MEMC permanently retaining $21.1 million of previously refundable deposits currently held by us which have been reclassified from customer deposits to deferred revenue. The deferred revenue will be amortized over the remaining term of the contract and recorded as revenue, $2.0 million of which was recorded in the first quarter of 2010. Another $7.0 million in short-term deposits are no longer required to be paid in the next twelve months and have therefore been classified as long-term. In addition, we applied $8.1 million of refundable security deposits against outstanding accounts receivable balances. The constructive receipt of the non-refundable deposit and corresponding reduction in refundable deposits of $19.1 million, as well as the application of the deposits against accounts receivables, have been reflected as cash provided by operating activities and cash used in financing activities in the unaudited condensed consolidated statement of cash flows.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Commitments and Contingencies	(15) Commitments and Contingencies Contingent Consideration We issued contingent consideration to be paid to the former SunEdison unit holders if certain operational criteria are met from January1, 2010 through December31, 2010. This consideration is to be paid in the form of cash and MEMC common stock and ranges from zero up to $89.0 million. As of March31, 2010, we have accrued approximately $78.5 million based on the estimated fair value of this contingency. Indemnification We have agreed to indemnify some of our Semiconductor Materials and Solar Materials 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 March31, 2010. We generally warrant the operation of our solar energy systems. Due to the absence of historical material warranty claims and expected future claims, we have not recorded a warranty accrual related to solar energy systems as of March31, 2010. 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 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. The appellate court has docketed the case and has directed that the parties file their briefs over the course of the next several months, after which, in November 2010, the appellate court has scheduled oral argument on the matter. A decision from the appellate court could be expected some time in 2011. 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

Reportable Segments

Reportable Segments
	3 Months Ended Mar. 31, 2010
Reportable Segments	(16) Reportable Segments Our reportable segments are determined based on the management of the businesses and the types of products sold and services provided. On November20, 2009, we completed the acquisition of SunEdison.Until the acquisition of SunEdison, MEMC was engaged in one reportable industry segmentthe design, manufacture and sale of silicon waferswhich was conducted as our Materials Business.From the time of the SunEdison acquisition until the end of 2009, MEMC was engaged in two reportable segments, Materials Business and Solar Energy Business (d/b/a SunEdison). Effective January1, 2010, MEMC reorganized its historical Materials Business operations into two separate businesses and is now engaged in three reportable segments: Semiconductor Materials, Solar Materials (both include the historical operations of MEMC) and Solar Energy (consists solely of SunEdison). This reorganization reflects how we are currently operating our business and analyzing our operating results. The Chief Operating Decision Maker (CODM) is our Chief Executive Officer. The CODM evaluates segment performance based on segment operating profit plus interest expense. In order to determine segment operating profit, standard costs are used as the basis for raw material costs allocated between segments and any related variances are allocated based on usage of those raw materials. MEMC incurs expenses for research and development costs and marketing activities that are not specific to any one segment or allocated to any segments. These costs, as well as general corporate marketing and administration costs, stock compensation expense, research and development administration costs, legal professional services and related costs, and other items are not evaluated by segment and are included in Corporate and other below. Because certain sites include operations, facilities and/or back office functions that are utilized to support our Semiconductor Materials and Solar Materials businesses, we do not have discrete financial information for total assets. Accordingly, the CODM does not consider total assets when analyzing segment performance. MEMCs Semiconductor Materials segment includes the development, production and marketing of wafers with a wide variety of features satisfying numerous product specifications to meet our customers exacting requirements, which wafers are utilized in the manufacture of semiconductor devices. MEMCs Solar Materials segment includes the development, production and marketing of square and pseudo-square crystalline solar wafers, which wafers are utilized by customers in the manufacture of solar cells, and then solar modules (panels), which convert energy from the sun into usable electrical energy. Our Solar Materials segment also includes our polysilicon production. MEMCs Solar Energy segment consists solely of SunEdison and includes the development and construction of solar power plants, which are then either sold or held to produce power. The results of the segment include the sale of solar plants and services for customers to purchase renewable energy by delivering solar power to them under long-term power purchase arrangements