10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-13828

MEMC ELECTRONIC MATERIALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	56-1505767
(State or other jurisdiction of incorporation or organization)	(I. R. S. Employer Identification No.)
501 Pearl Drive (City of O’Fallon) St. Peters, Missouri	63376
(Address of principal executive offices)	(Zip Code)

(636) 474-5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in
Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of the registrant’s common stock outstanding at August 5, 2011 was 230,433,037.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

	Three Months Ended June  30,						Six Months Ended June 30,
	2011			2010			2011			2010
Net sales (includes income from Suntech agreement of $149.4 for the three and six months ended June 30, 2011 - see Note 15)	$	745.6		$	448.3		$	1,481.5		$	886.0
Cost of goods sold (includes take or pay charges of $52.4 for the three and six months ended June 30, 2011 - see Note 16)		564.5			371.4			1,186.4			749.8
Gross profit		181.1			76.9			295.1			136.2
Operating expenses:
Marketing and administration		94.0			72.6			187.0			134.8
Research and development		21.8			11.5			42.8			22.6
Restructuring and impairment charges		13.6			1.4			13.8			2.7
Insurance recovery		—			(11.9	)		—			(11.9	)
Operating income (loss)		51.7			3.3			51.5			(12.0	)
Non-operating expense (income):
Interest expense		21.2			6.0			30.2			18.1
Interest income		(0.9	)		(1.8	)		(1.8	)		(4.1	)
Decline in fair value of warrant		1.9			6.8			0.3			12.1
Other, net		(17.2	)		(7.0	)		(17.6	)		(6.4	)
Total non-operating expense		5.0			4.0			11.1			19.7
Income (loss) before income taxes and equity in earnings of joint venture		46.7			(0.7	)		40.4			(31.7	)
Income tax expense (benefit)		0.9			(16.1	)		(13.4	)		(30.7	)
Income (loss) before equity in earnings of joint venture		45.8			15.4			53.8			(1.0	)
Equity in earnings of joint venture, net of tax		2.0			—			3.3			7.3
Net income		47.8			15.4			57.1			6.3
Net income attributable to noncontrolling interests		(0.5	)		(1.6	)		(14.3	)		(2.1	)
Net income attributable to MEMC stockholders	$	47.3		$	13.8		$	42.8		$	4.2
Basic income per share	$	0.21		$	0.06		$	0.19		$	0.02
Diluted income per share	$	0.21		$	0.06		$	0.19		$	0.02
Weighted-average shares used in computing basic income per share		229.8			226.8			229.4			226.8
Weighted-average shares used in computing diluted income per share		230.9			228.0			231.0			227.9

See accompanying notes to unaudited condensed consolidated financial statements.

2

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)

	June 30, 2011		December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	651.9	$	707.3
Restricted cash		38.1		43.8
Accounts receivable, less allowance for doubtful accounts of $7.8 in 2011 and 2010		272.9		296.0
Inventories		335.4		214.6
Solar energy systems held for development and sale, including consolidated variable interest entities of $39.5 and $151.8 in 2011 and 2010, respectively		226.5		237.5
Income taxes receivable		25.6		35.6
Prepaid and other current assets		269.2		202.5
Total current assets		1,819.6		1,737.3
Investments		145.2		110.3
Property, plant and equipment, net:
Semiconductor and Solar Materials, net of accumulated depreciation of $764.5 and $694.6 in 2011 and 2010, respectively		1,677.5		1,465.9
Solar energy systems, including consolidated variable interest entities of $58.6 and $56.2 in 2011 and 2010, respectively, net of accumulated depreciation of $23.2 and $14.3 in 2011 and 2010, respectively		740.0		567.6
Deferred tax assets, net		211.3		139.3
Restricted cash		20.0		18.7
Other assets		228.8		177.6
Goodwill		404.9		342.7
Intangible assets, net		50.1		52.5
Total assets	$	5,297.4	$	4,611.9

See accompanying notes to unaudited condensed consolidated financial statements.

3

	June 30, 2011			December 31, 2010
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	10.7		$	6.4
Short-term solar energy system financing, current portion of solar energy system financing and capital lease obligations, including consolidated variable interest entities of $5.9 and $28.8 in 2011 and 2010, respectively		59.0			65.7
Accounts payable		608.4			745.5
Accrued liabilities		180.6			165.4
Contingent consideration related to acquisitions		51.0			106.4
Accrued wages and salaries		57.5			50.4
Deferred revenue for solar energy systems		27.8			8.8
Customer deposits		60.2			92.9
Income taxes payable		80.2			42.6
Total current liabilities		1,135.4			1,284.1
Long-term debt and capital lease obligations, less current portion		641.5			20.5
Long-term solar energy system financing and capital lease obligations, less current portion, including consolidated variable interest entities of $86.8 and $107.2 in 2011 and 2010, respectively		693.2			590.1
Pension and post-employment liabilities		56.1			54.1
Deferred revenue for solar energy systems		112.7			75.0
Semiconductor and Solar Materials deferred revenue		52.7			115.2
Other liabilities		179.4			177.3
Total liabilities		2,871.0			2,316.3
Stockholders’ equity:
Preferred stock, $.01 par value, 50.0 shares authorized, none issued and outstanding at 2011 and 2010		—			—
Common stock, $.01 par value, 300.0 shares authorized, 240.6 and 237.9 shares issued at 2011 and 2010, respectively		2.4			2.4
Additional paid-in capital		603.2			557.9
Retained earnings		2,156.3			2,113.5
Accumulated other comprehensive income		74.8			34.1
Treasury stock, 10.3 and 10.0 shares in 2011 and 2010, respectively		(458.9	)		(456.2	)
Total MEMC stockholders’ equity		2,377.8			2,251.7
Noncontrolling interests		48.6			43.9
Total stockholders’ equity		2,426.4			2,295.6
Total liabilities and stockholders’ equity	$	5,297.4		$	4,611.9

See accompanying notes to unaudited condensed consolidated financial statements.

4

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Six Months Ended June 30,
	2011			2010
Cash flows from operating activities:
Net income	$	57.1		$	6.3
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		104.6			76.1
Stock-based compensation		21.0			29.0
Benefit for deferred taxes		(69.1	)		(13.9	)
Deferred revenue recognized		(40.9	)		(0.7	)
Impairment on deposits for take-or-pay agreements		50.2			—
Decline in fair value of warrant		0.3			12.1
Change in accounts receivable		8.5			(108.4	)
Change in accounts payable		(38.6	)		62.8
Change in inventories		(115.2	)		6.3
Change in income taxes receivable and payable		44.5			41.6
Deferred revenue for solar energy systems		49.9			6.1
Working capital and other		(98.7	)		(108.6	)
Net cash (used in) provided by operating activities		(26.4	)		8.7
Cash flows from investing activities:
Capital expenditures		(308.1	)		(141.1	)
Construction of solar energy systems		(226.7	)		(111.7	)
Proceeds from sale and maturities of investments		—			146.8
Purchases of equity method investments		(49.3	)		(10.0	)
Proceeds from return of equity method investment		13.7			77.6
Restricted cash		(15.9	)		6.0
Payments to vendors for refundable deposits on long-term agreements		(18.8	)		(28.0	)
Proceeds from sale of property, plant and equipment		37.1			—
Cash paid for acquistion, net of cash acquired		(28.7	)		—
Cash received from net investment hedges		—			18.5
Other		(0.6	)		2.7
Net cash used in investing activities		(597.3	)		(39.2	)
Cash flows from financing activities:
Proceeds from senior notes issuance		550.0			—
Cash paid for SunEdison acquisition contingent consideration		(50.2	)		—
Proceeds from financing obligations		217.6			106.6
Repayments of financing and capital lease obligations		(66.9	)		(15.8	)
Net repayments of customer deposits related to long-term supply agreements		(51.2	)		(27.7	)
Principal payments on long-term debt		(1.8	)		(3.0	)
Common stock issued and repurchased		(2.7	)		(0.3	)
Proceeds from noncontrolling interests		—			9.7
Return of investment and dividends to noncontrolling interests		(15.2	)		—
Debt financing fees		(23.4	)		(9.0	)
Net cash provided by financing activities		556.2			60.5
Effect of exchange rate changes on cash and cash equivalents		12.1			(9.7	)
Net (decrease) increase in cash and cash equivalents		(55.4	)		20.3
Cash and cash equivalents at beginning of period		707.3			632.7
Cash and cash equivalents at end of period	$	651.9		$	653.0
Supplemental schedule of non-cash financing activity:
Debt transferred to and assumed by buyer upon sale of solar energy systems	$	66.1		$	43.3
A capital lease obligation of $78.9 was incurred when the Company entered into a lease for new property, plant and equipment during the six months ended June 30, 2011

See accompanying notes to unaudited condensed consolidated financial statements.

5

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(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 Commission’s (“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 (“U.S. GAAP”). These unaudited condensed consolidated financial statements should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2010, which contains MEMC’s audited financial statements for such year. Operating results for the three and six month periods ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

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 including warranties, employee benefits, derivatives, stock based compensation, income taxes, solar energy system installation and related costs, percentage-of-completion on long-term construction contracts, the fair value of assets and liabilities recorded 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.

New Significant Accounting Policies

Revenue Arrangements with Multiple Deliverables

In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2009-13 (“ASU
2009-13”), which updates the current guidance pertaining to multiple-element revenue arrangements included in Accounting Standards Codification (“ASC”) Subtopic 605-25. The Company adopted this guidance on January 1, 2011.

SunEdison solar energy system sales and post-system-sale operation and maintenance service contracts are usually negotiated and executed contemporaneously, which we evaluate together as a single arrangement with multiple deliverables in accordance with ASC 605-25, Multiple-Element-Arrangements, as updated by the FASB issued Accounting Standards Update 2009-13. Under ASC 605-25, we allocate revenue for transactions involving multiple elements to each unit of accounting based on its relative selling price, and recognize revenue for each unit of accounting when the revenue recognition criteria have been met.

New Accounting Standards Adopted

In April 2010, the FASB issued Accounting Standards Update 2010-17 (“ASU 2010-17”), which updates the current guidance pertaining to the milestone method of revenue recognition included in ASC Topic 605. This guidance was adopted on January 1, 2011 and did not have a material impact on MEMC’s financial position or results of operations.

In December 2010, the FASB issued Accounting Standards Update 2010-28 (“ASU 2010-28”) which affects all entities that have recognized goodwill and have one or more reporting units whose carrying amount for purposes of performing Step 1 of the goodwill impairment test is zero or negative. This guidance modifies Step 1 so that for those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. This guidance is effective for annual reporting periods beginning after December 15, 2010 on a prospective basis. This update was adopted as of January 1, 2011 and did not have a material impact on MEMC’s financial position.

(2) Restructuring and Impairment Charges

During the three and six months ended June 30, 2011, we recorded restructuring and impairment charges of $13.6 million and $13.8 million, respectively. Of these amounts, $3.6 million and $3.8 million, respectively, relate to the prior 2009 U.S. Plan as discussed below.

During June 2011, MEMC committed to actions to reduce overall manufacturing costs across its global sites as well as to realign certain general and administrative expenses due to industry and customer specific developments (the “2011 Global Plan”). These actions included relocation of certain operations and reductions in headcount. During the quarter ended June 30, 2011, we recorded restructuring charges of $6.8 million for severance and other related employee benefits. In connection with these activities, we also recorded impairment of certain assets totaling $3.2 million. We expect these activities to be completed by December 31, 2012.

6

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 MEMC’s customers in the Asia Pacific region (the “2009 U.S. Plan”). MEMC will provide severance benefits to those employees who will be terminated under the 2009 U.S. Plan. We expect the 2009 U.S. Plan to be completed in the second quarter of 2013, which was extended from 2012. Restructuring expenses for the 2009 Plan recorded in 2011 relate primarily to a third-party supply contract for one of the restructured facilities, which was terminated in the second quarter of 2011. In the three and six-months ended June 30, 2010, we recorded restructuring expenses of $1.4 million and $2.7 million, respectively, primarily for employee benefits and equipment moving costs related to the 2009 U.S. Plan.

Details of expenses related to the 2009 U.S. Plan are set forth in the following table:

										As of June 30, 2011
In millions	Accrued, December  31, 2010		Year-to-Date Restructuring Charges		Cash Payments			Accrued, June 30, 2011		Cumulative Costs Incurred		Total Costs Expected to be Incurred
2009 U.S. Plan
Severance and other employee benefits	$	16.2	$	0.1	$	(1.1	)	$	15.2	$	18.3	$	19.2
Asset move costs		—		0.8		(0.8	)		—		4.0		20.3
Contract termination		—		2.9		—			2.9		2.9		2.9
Infrastructure costs		—		—		—			—		—		4.0
Total	$	16.2	$	3.8	$	(1.9	)	$	18.1	$	25.2	$	46.4

(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 June 30, 2011											As of December 31, 2010
Assets (liabilities) in millions	Level 1		Level 2			Level 3			Total			Level 1			Level 2			Level 3			Total
Available for sale investments	$	—	$	35.4		$	—		$	35.4		$	—		$	41.1		$	—		$	41.1
Suntech warrant		—		—			4.9			4.9			—			—			5.2			5.2
Interest rate swaps and option thereon		—		(2.8	)		—			(2.8	)		—			(4.3	)		—			(4.3	)
Currency forward contracts		12.8		—			—			12.8			(7.0	)		—			—			(7.0	)
Other derivatives		—		—			1.8			1.8			—			—			1.6			1.6
Contingent consideration related to acquisitions		—		—			(51.0	)		(51.0	)		(80.2	)		—			(26.2	)		(106.4	)
Total	$	12.8	$	32.6		$	(44.3	)	$	1.1		$	(87.2	)	$	36.8		$	(19.4	)	$	(69.8	)

The Suntech warrant consists of a fully vested, non-forfeitable warrant to purchase common shares of Suntech, a customer, which was received at the time that MEMC signed a long-term supply agreement with Suntech. 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 the making of estimates and assumptions, including Suntech’s stock price volatility, interest rate, dividends, marketability and expected return requirements. The Suntech warrant is considered a derivative and, accordingly, changes in the value of the warrant are recorded in non-operating (income) expense.

We have estimated the fair value of the contingent consideration related to acquisitions at $51.0 million as of June 30, 2011, which reflects a discount at a credit adjusted interest rate for the period of the contingency. That measure is based on significant inputs that are not observable in the market, which U.S. GAAP refers to as Level 3 inputs. Key assumptions include (i) a discount percentage and (ii) a probability adjustment related to the entities ability to meet operational metrics.

7

The carrying amount of our outstanding short-term debt, long-term debt and capital lease obligations at June 30, 2011 and December 31, 2010 was $1,404.4 million and $682.7 million, respectively. The estimated fair value of that debt and capital lease obligations was $1,153.6 million and $510.4 million at June 30, 2011 and December 31, 2010, respectively. Fair value of our debt, excluding the 2019 Notes, is calculated using a discounted cash flow model with consideration for our non-performance risk. The estimated fair value of our 2019 Notes was based upon a broker quotation. Our debt primarily consists of non-recourse solar energy system financing at SunEdison and our 2019 Notes as described in Note 11.

As of December 31, 2010, we recorded $80.2 million of contingent consideration for the SunEdison acquisition. This liability was paid on February 1, 2011 based on achievement of the earnout performance objectives for a combination of $55.7 million in cash and the issuance of 2.1 million shares in MEMC common stock. That measure was based on the cash amount and the stock price at the date of issuance, which U.S. GAAP refers to as Level 1 inputs.

There were no transfers into or out of Level 1 and Level 2 financial instruments during the six months ended June 30, 2011 other than the SunEdison contingent consideration payment of $80.2 million and the extinguishment of derivative liabilities of $2.1 million.

The following table summarizes changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the six months ended June 30, 2010 and June 30, 2011:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
In millions	Available for Sale Investments			Trading Investments			Auction Rate Securities Right			Suntech Warrant			Contingent consideration related to acquisitions			Other Derivatives		Total
Balance at December 31, 2009	$	11.6		$	38.4		$	2.0		$	19.2		$	(77.4	)	$	—	$	(6.2	)
Total unrealized gains (losses) included inearnings(1)		—			0.3			(1.8	)		(12.1	)		(4.7	)		—		(18.3	)
Total unrealized gains included in other comprehensive income, net		0.2			—			—			—			—			—		0.2
Sales, redemptions and maturities		(9.2	)		(32.9	)		—			—			—			—		(42.1	)
Transfers out of Level 3, net		(2.6	)		—			—			—			—			—		(2.6	)
Balance at June 30, 2010	$	—		$	5.8		$	0.2		$	7.1		$	(82.1	)	$	—	$	(69.0	)
Balance at December 31, 2010	$	—		$	—		$	—		$	5.2		$	(26.2	)	$	1.6	$	(19.4	)
Total unrealized (losses) gains included in earnings(1)		—			—			—			(0.3	)		6.2			0.2		6.1
Acquisitions		—			—			—			—			(31.0	)		—		(31.0	)
Balance at June 30, 2011	$	—		$	—		$	—		$	4.9		$	(51.0	)	$	1.8	$	(44.3	)
The amount of total (losses) gains for the six months ended June 30, 2011 included in earnings attributable to the change in unrealized (losses) gains relating to assets and liabilities still held at the reporting date	$	—		$	—		$	—		$	(0.3	)	$	6.2		$	0.2	$	6.1

⁽¹⁾  Amounts included in earnings are recorded to non-operating expense (income) in the consolidated statements of operations, except for the amount included in marketing and administration for the contingent consideration related to acquisitions, for which changes to the fair value were recorded to operating income (loss) in the consolidated statement of operations.

8

(4) Derivatives and Hedging Instruments

MEMC’s derivatives and hedging activities consist of:

		Assets (Liabilities or Equity) Fair Value
In millions	Balance Sheet Location	As of June  30, 2011			As of December 31, 2010
Derivatives designated as hedging:
Interest rate swaps	Accrued liabilities	$	(3.4	)	$	(6.2	)
Interest rate swaps	Prepaid and other current assets	$	0.6		$	0.7
Interest rate swaps	Accumulated other comprehensive income	$	0.8		$	2.4
Currency forward contracts	Accrued liabilities	$	—		$	(8.6	)
Currency forward contracts	Accumulated other comprehensive income	$	—		$	8.6
Derivatives not designated as hedging:
Suntech warrant	Other assets	$	4.9		$	5.2
Currency forward contracts	Prepaid and other current assets	$	14.3		$	2.1
Currency forward contracts	Accrued liabilities	$	(1.5	)	$	(0.5	)
Other derivatives	Prepaid and other current assets	$	—		$	1.2
Other derivatives	Other assets	$	1.8		$	1.6

		(Gains) Losses
		Three Months Ended June 30,						Six Months Ended June 30,
In millions	Statement of Operations Location	2011			2010			2011			2010
Derivatives designated as hedging:
Net investment hedge	Other, net	$	—		$	(16.9	)	$	—		$	(16.9	)
Derivatives not designated as hedging:
Suntech warrant	Decline in fair value of warrant	$	1.9		$	6.8		$	0.3		$	12.1
Currency forward contracts	Other, net	$	(12.0	)	$	(2.7	)	$	(10.2	)	$	(3.8	)

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. As of June 30, 2011 and December 31, 2010, these currency forward contracts had net notional amounts of $166.0 million and $78.7 million, respectively. 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.

In addition to the currency forward contracts purchased to hedge transactional currency risks, we have entered into currency forward contracts to hedge cash flow risks associated with future purchases of raw materials denominated in Euros. These forward contracts were established as cash flow hedges designed to protect against the variability in foreign currency rates between the Euro and U.S. Dollars. The cash flow hedges were accounted for using hedge accounting. The notional amount of the currency forward contracts designated and accounted for as cash flow hedges as of June 30, 2011 and December 31, 2010 was $317.4 million and $377.3 million, respectively. As of June 30, 2011, the future purchases of raw materials associated with these cash flow hedges were no longer deemed probable and accordingly, the related gains of $14.2 million on the forward contracts were reclassified from accumulated other comprehensive income into earnings. During the 2011 third quarter, these forward contracts were liquidated.

9

We are party to interest rate swap instruments with notional amounts totaling approximately $85.1 million and $146.2 million at June 30, 2011 and December 31, 2010, respectively, 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 financial institution counterparties to the agreements pay MEMC a floating interest rate. 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 settle on June 30, 2011 if the agreements were transferred to other third parties or cancelled by MEMC. The effective portion of these hedges during the three and six-months ended June 30, 2011 was recorded to accumulated other comprehensive income. Ineffectiveness of $0.5 million and $0.7 million was recognized in the three and six-months ended June 30, 2011, respectively, and no such amount was recognized in the respective periods in 2010.

The Suntech warrant consists of a fully vested, non-forfeitable warrant to purchase common shares of Suntech, a customer. The warrant was received in 2006 at the time that MEMC signed a long-term supply agreement with Suntech. The long-term supply agreement was terminated in the second quarter of 2011, but the termination had no impact on the warrant. The Suntech warrant exposes MEMC to equity price risk.

(5) Comprehensive Income (Loss)

Comprehensive income (loss) consists of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
In millions	2011			2010			2011			2010
Net income	$	47.8		$	15.4		$	57.1		$	6.3
Other comprehensive (loss) income, net of tax:
Net translation adjustment		17.4			(40.1	)		40.6			(50.6	)
Net unrealized loss on available-for-sale securities		(10.2	)		(15.3	)		(5.6	)		(5.8	)
Hedging instruments		(12.7	)		(4.9	)		10.2			(4.2	)
Net actuarial loss, prior service credit, and transition obligation		—			—			(0.2	)		—
Other comprehensive (loss) income, net of tax		(5.5	)		(60.3	)		45.0			(60.6	)
Total comprehensive income (loss)		42.3			(44.9	)		102.1			(54.3	)
Net income attributable to noncontrolling interests		(0.5	)		(1.6	)		(14.3	)		(2.1	)
Net translation adjustment attributable to noncontrolling interests		(3.1	)		2.9			(4.3	)		1.8
Comprehensive income (loss) attributable to MEMC stockholders	$	38.7		$	(43.6	)	$	83.5		$	(54.6	)

10

(6) Earnings Per Share

For the three month periods ended June 30, 2011 and June 30, 2010, basic and diluted earnings per share (“EPS”) were calculated as follows:

	Three Months Ended				Three Months Ended
	June 30, 2011				June 30, 2010
In millions, except per share amounts	Basic		Diluted		Basic		Diluted
EPS Numerator:
Net income allocable to common stockholders	$	47.3	$	47.3	$	13.8	$	13.8
EPS Denominator:
Weighted-average shares outstanding		229.8		229.8		226.8		226.8
Stock options and restricted stock units		—		1.1		—		1.2
Total shares		229.8		230.9		226.8		228.0
Earnings per share	$	0.21	$	0.21	$	0.06	$	0.06

For the six month periods ended June 30, 2011 and June 30, 2010, basic and diluted earnings per share were calculated as follows:

	Six Months Ended				Six Months Ended
	June 30, 2011				June 30, 2010
In millions, except per share amounts	Basic		Diluted		Basic		Diluted
EPS Numerator:
Net income allocable to common stockholders	$	42.8	$	42.8	$	4.2	$	4.2
EPS Denominator:
Weighted-average shares outstanding		229.4		229.4		226.8		226.8
Stock options and restricted stock units		—		1.6		—		1.1
Total shares		229.4		231.0		226.8		227.9
Earnings per share	$	0.19	$	0.19	$	0.02	$	0.02

On February 1, 2011, we issued 2.1 million shares to SunEdison’s former unit holders as part of the contingent consideration pursuant to the terms of the acquisition agreement. Approximately $4.9 million of the initial stock consideration due to SunEdison’s former unit holders was held in escrow pursuant to the terms of the acquisition agreement as of June 30, 2011. A portion of the shares held in escrow at June 30, 2011 were released during the third quarter of 2011.

For the three months ended June 30, 2011 and June 30, 2010, 20.0 million and 13.1 million shares, respectively, of options and restricted stock units were excluded from the calculation of diluted EPS because the effect was antidilutive. For the six months ended June 30, 2011 and June 30, 2010, 20.4 million and 11.8 million shares, respectively, of options and restricted stock units were excluded from the calculation of diluted EPS because the effect was antidilutive.

11

(7) Inventories

Inventories consist of the following:

	As of		As of
In millions	June 30, 2011		December 31, 2010
Raw materials and supplies	$	144.8	$	104.8
Goods and work in process		103.2		58.0
Finished goods		87.4		51.8
	$	335.4	$	214.6

Due to the earthquake in Japan on March 11, 2011, wafer production in our semiconductor wafer plant in Japan was suspended from that time through April 12, 2011. Because of the unplanned downtime, we recorded $7.2 million and $14.9 million in the three and six months ended June 30, 2011, respectively, as period charges to cost of goods sold for the under absorption of production costs resulting in variances and inventory adjustments. We had no similar adjustments during the first six months of 2010.

We recorded charges of approximately $14.2 million in the quarter ended June 30, 2011 primarily related to our Kuching solar wafering plant as it ramps to full capacity.

(8) Solar Energy Systems Held for Development and Sale

Solar energy systems held for development and sale consist of the following:

	As of		As of
In millions	June 30, 2011		December 31, 2010
Under development	$	183.0	$	68.8
Systems held for sale		43.5		168.7
	$	226.5	$	237.5

(9) Investments

Joint Venture Investments

We have made investments in our joint ventures totaling $86.2 million as of June 30, 2011. Generally, the joint ventures are for capacity in our Solar Materials segment. The total amount of our remaining contractual investment commitment to our joint ventures as of June 30, 2011 is up to an additional $179.4 million. There is no contractually specified time period for a significant portion of these commitments.

Zhenjiang Huantai (formerly Jiangsu Huantai) Joint Venture

In May 2010, we entered into an equity method joint venture with Zhenjiang Huantai Silicon Science Ltd. Co. (formerly Jiangsu Huantai Group Co. Ltd) for the manufacture of multicrystalline ingots and wafers in Yangzhong City, Jiangsu Province, China (the “Zhenjiang Huantai JV”). During the quarter ended March 31, 2011, MEMC made an equity contribution of $17.8 million and provided a short-term loan of $3.1 million to the joint venture for working capital requirements. No such contributions were made during the quarter ended June 30, 2011. MEMC’s total equity investment balance was $58.1 million at June 30, 2011 and $10.0 million at June 30, 2010.

Samsung Fine Chemicals Joint Venture

In February 2011, we entered into a joint venture with Samsung Fine Chemicals Co. Ltd. for the construction and operation of a new facility to produce high purity polysilicon in Ulsan, South Korea. The joint venture will manufacture and supply polysilicon to MEMC and to the international markets. MEMC Singapore Pte. Ltd’s. ownership of the joint venture will be 50% and Samsung Fine Chemicals Co. Ltd will own the other 50%. MEMC’s total commitments are expected to be $175.0 million through 2012. During the second quarter of 2011, the Company invested $13.8 million in the joint venture, which represents our investment at June 30, 2011.

12

Investments Recorded at Fair Value

As of June 30, 2011 and December 31, 2010, the only investment recorded at fair value was an equity security investment in the common stock of a customer (Gintech), which investment is classified as a long-term available for sale investment. As of June 30, 2011 and December 31, 2010, the fair value of the investment was $35.4 million and $41.1 million, respectively. The cost basis in the investment is $12.4 million.

The carrying value of short-term and long-term investments consists of the following:

	As of		As of
In millions	June 30, 2011		December 31, 2010
Items measured at fair value on a recurring basis	$	35.4	$	41.1
Equity method investments		86.2		46.1
Time deposits		0.2		0.1
Equity investments at cost		23.6		23.1
Total investments		145.4		110.4
Less: short-term investments		0.2		0.1
Non-current investments	$	145.2	$	110.3

There have been no other-than-temporary impairments on our cost method investments during the six months ended June 30, 2011. We have assessed and determined that there have been no events or circumstances that had a material adverse effect on the investments during this period.

13

(10) Goodwill and Intangible Assets

Intangible assets at June 30, 2011 and December 31, 2010 are as follows:

	Weighted Average Amortization Period	Gross Carrying Amount				Accumulated Amortization or Allocated to Solar Energy System						Net Carrying Amount
		June 30,		December 31,		June 30,			December 31,			June 30,		December 31,
Dollars in millions		2011		2010		2011			2010			2011		2010
Amortizable intangible assets:
Favorable energy credits	7	$	14.2	$	14.2	$	(4.7	)	$	(3.2	)	$	9.5	$	11.0
Customer relationships(1)	6		6.5		5.4		(1.4	)		(0.8	)		5.1		4.6
Trade name	15		4.1		4.1		(0.4	)		(0.3	)		3.7		3.8
Internally developed software	3		1.8		1.3		(0.8	)		(0.5	)		1.0		0.8
Developed technology(1)	5		20.0		20.0		(2.7	)		(1.3	)		17.3		18.7
Customer sales backlog(1)	1		0.4		0.4		(0.4	)		(0.2	)		—		0.2
Total amortizable intangible assets		$	47.0	$	45.4	$	(10.4	)	$	(6.3	)	$	36.6	$	39.1
Indefinite lived assets:
In-process technology(1)	Indefinite	$	0.3	$	0.3	$	—		$	—		$	0.3	$	0.3
Power plant development arrangements(2)	Indefinite		19.8		18.0		(6.6	)		(4.9	)		13.2		13.1
Total indefinite lived assets		$	20.1	$	18.3	$	(6.6	)	$	(4.9	)	$	13.5	$	13.4

(1) These intangibles represent the amounts acquired in the Solaicx acquisition, except there is a carrying amount of $7.1 million for SunEdison included within the customer relationships intangible. The useful life for in-process technology will be determined once the research and development process is complete and at that time amortization of the asset will begin.

(2) Power plant development arrangements are allocated to the solar energy system (fixed assets or inventory) upon completion of the related solar energy systems stemming from the backlog at the date of acquisition.

During the first quarter of 2011, SunEdison completed the acquisition of 100% of the voting equity of a company for a purchase price of $9.1 million, of which $5.0 million relates to contingent consideration. We recorded $7.1 million and $2.0 million to goodwill and acquired intangible assets, respectively.

During the three months ended June 30, 2011, SunEdison completed the acquisition of 100% of the voting equity of another company for a preliminary GAAP purchase price of $71.6 million, of which an estimated $26.0 million relates to contingent consideration payable in cash and a fixed number of shares of MEMC stock. This acquisition, which included project pipeline, is intended to further develop our solar energy systems’ business, leveraging the synergies between our Solar Energy and Solar Materials segments. We preliminarily recorded $55.9 million to goodwill. As of June 30, 2011, management has not completed the purchase accounting valuation for these transactions due to the ongoing review of the assumptions, methodologies and calculations of the fair value of the contingent consideration and acquired intangible assets. The total excess purchase price has been recorded to goodwill because we have not completed valuations of the expected intangible assets, primarily comprised of backlog. We anticipate allocating a portion of the recorded amount of goodwill to intangible assets upon completion of the valuations of the intangible assets. We have not provided proforma financial information because the acquisition is not considered significant.

As of June 30, 2011, MEMC had consolidated goodwill of $404.9 million of which $348.5 and $56.4 million is recorded in the Solar Energy reporting unit and Solar Materials reporting unit, respectively. We evaluate goodwill for impairment on an annual basis on the first day of December each fiscal year, as well as whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the interim period ended June 30, 2011, we evaluated whether events or changes in circumstances occurred which would require a detailed test of goodwill for impairment as of an interim date. As of June 30, 2011, MEMC had a net book value of approximately $2.4 billion and a market capitalization on our common stock of approximately $2.0 billion. During the last month of June 2011 and continuing through early August 2011, we have observed a strong correlation between the decline in our market capitalization and the decline in pricing in the solar wafer market. We evaluated the following items, among others, in determining whether there was sufficient evidence of material events or changes in circumstances requiring a detailed test of goodwill impairment as of an interim date: the impact of solar wafer price declines on our raw material costs for our Solar Energy reporting unit; advanced materials technologies at our Solar Materials reporting unit; the financial performance of each reporting unit in fiscal year 2011 to date; and our internal forecast data. Based on the above, we did not believe a detailed test of goodwill impairment was required as of June 30, 2011.

14

(11) Debt and Capital Lease Obligations

Debt (including consolidated variable interest entities (“VIEs”)) and capital leases outstanding consist of the following:

	As of June 30,		As of December 31,
In millions	2011		2010
Short-term debt:
Solar energy systems, weighted average interest rate of 6.15% and 6.13%, respectively	$	29.0	$	33.6
Long-term debt and capital leases:
Senior notes	$	550.0	$	—
Solar energy systems:
Capital lease obligations		118.2		125.7
Finance obligations		605.0		496.5
Long-term notes		22.3		24.0
Capital leases for equipment and other debt		79.9		2.9
Total long-term debt and capital leases		1,375.4		649.1
Less current portion - Long-term notes, capital leases for equipment and other debt		10.7		6.4
Less current portion - Solar energy systems		30.0		32.1
Long-term portion	$	1,334.7	$	610.6

Senior Notes

On March 10, 2011, we issued $550.0 million of 7.75 % Senior Notes due April 1, 2019 (the “2019 Notes”). We incurred $13.8 million in debt issuance costs, which is amortized into the statement of operations over the eight year term. The 2019 Notes were sold at a price equal to 100% of the principal amount thereof. The interest on the 2019 Notes is payable semi-annually, in cash in arrears, on April 1 and October 1, commencing October 1, 2011. We may redeem the 2019 Notes at our option, in whole or in part, at any time on or after April 1, 2014, upon not less than 30 nor more than 60 days’ notice at the redemption prices (expressed as percentages of the principal amount to be redeemed) set forth below, plus any accrued and unpaid interest and additional interest, if any, to the redemption date, if redeemed during the 12-month period beginning on April 1 of the years indicated below.

Year	Price
2014		105.813%
2015		103.875%
2016		101.938%
2017 and thereafter		100.000%

If a change of control of MEMC occurs, each holder of the 2019 Notes will have the right to require us to repurchase all or any part of that holder’s notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest and additional interest, if any, to the date of the repurchase.

The 2019 Notes were guaranteed by certain of MEMC’s domestic subsidiaries (the “guarantors”). The 2019 Notes are senior unsecured obligations and will be subordinated to all of our and the guarantors’ existing and future secured debt.

The indenture governing the 2019 Notes contains covenants that limit our and our subsidiaries’ ability, subject to certain exceptions and qualifications, (i) to make certain asset sales, (ii) to make other restricted payments and investments, (iii) to incur indebtedness and issue preferred stock, (iv) to issue dividends, (v) to make other payments affecting restricted subsidiaries, (vi) to enter into certain transactions with affiliates, and (vii) to merge, consolidate or sell substantially all of our assets. These covenants are subject to a number of qualifications and limitations, and in certain situations, a cross default provision. As of June 30, 2011, we were in compliance with all covenants in the indenture governing the 2019 Notes.

15

In addition, the indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among other things: failure to make payments on the 2019 Notes when due, failure to comply with covenants under the indenture, failure to pay other indebtedness or acceleration of maturity of other indebtedness, failure to satisfy or discharge final judgments and occurrence of bankruptcy events.

Corporate Credit Facility

On March 23, 2011, the Company amended and restated its existing Corporate Credit Facility. The amended facility provides for total borrowings of up to $400 million, has an accordion feature to provide for borrowings of up to $550 million in the aggregate (upon terms to be agreed upon by the parties at the time of such request), and has a three year term. While the original Corporate Credit Facility was secured by a pledge of 65% of the capital stock of certain of our domestic and foreign subsidiaries, the amended and restated Corporate Credit Facility is also secured by substantially all the assets of MEMC and its domestic subsidiaries.

Interest on borrowings under the Corporate Credit Facility will be based on either, at our election, LIBOR plus an initial applicable margin of 2.75% or at a defined prime rate plus an initial applicable margin of 1.75%. The amended facility also provides for the Company to pay various fees, including a commitment fee of 0.50% on the lenders’ unused commitments. The amended facility contains covenants which are typical for credit arrangements of this size, including covenants relating to a consolidated interest charge ratio, consolidated leverage ratio and a minimum liquidity ratio. There is also a cross default provision which may be triggered in certain situations.

As part of the amended and restated Corporate Credit Facility, we incurred debt issuance costs of $4.6 million, which is amortized into the statement of operations over the three year term of the facility. As of June 30, 2011, we had no outstanding borrowings under this facility. Outstanding third party letters of credit backed by this facility at such date were $109.8 million. As of June 30, 2011, we were in compliance with all covenants contained in the agreement governing this facility.

Finance and Capital Lease Obligations

We have short-term committed financing arrangements renewable annually of approximately $59.0 million at June 30, 2011, of which there were no short-term borrowings outstanding at June 30, 2011. Of the $59.0 million committed short-term financing arrangements, $37.8 million is unavailable because of the issuance of third party letters of credit. Interest rates are negotiated at the time of the borrowings.

We have additional long-term committed financing arrangements of approximately $1,003.0 million at June 30, 2011, of which $572.3 million is outstanding, including the $550.0 million for the 2019 Notes. Of the $1,003.0 million committed long-term financing arrangements, $125.1 million is unavailable because it relates to the issuance of third party letters of credit. We pay commitment fees of up to 1.0% on the committed loan agreements.

Our solar energy systems for which we have short-term debt, capital lease and finance obligations are included in separate legal entities. The short-term debt, capital lease and finance obligations of $29.0 million, $118.2 million and $605.0 million, respectively, except for $36.6 million of finance obligations, have recourse to those separate legal entities but no recourse to MEMC or the SunEdison parent under the terms of the applicable agreements. These obligations may also include limited guarantees by MEMC or the SunEdison parent related to operations, maintenance and certain indemnities. The recourse finance obligations above are collateralized by the related solar energy system assets.

The capital leases for equipment and other debt of $79.9 million contains $77.6 million that relates to a long-term supply agreement executed in 2008 that conveys to MEMC the right to use specific property, plant and equipment and is therefore considered a lease arrangement. The underlying leased property, plant and equipment was placed into service during the second quarter of 2011, at which time the related assets and corresponding capital lease obligation was capitalized.

On March 31, 2011, one of SunEdison’s project subsidiaries signed and executed a master lease agreement with a U.S. financial institution which provides for the sale and simultaneous leaseback of certain solar energy systems constructed by SunEdison. The total capacity under this agreement is $120 million, of which $112.6 million is available as of June 30, 2011. The specified rental payments will be based on projected cash flows that the solar energy systems will generate.

16

The schedule of principal payments on long-term debt (including consolidated VIEs and excluding solar energy system financing obligations) is as follows:

In millions	As of June  30, 2011
July 1, 2011 through December 31, 2011	$	6.0
2012		46.4
2013		9.2
2014		9.4
2015		9.6
Thereafter		652.9
Total	$	733.5

As of June 30, 2011, the aggregate amounts of minimum lease payments on our financing sale leaseback transactions are $365.0 million. Future payments from 2011 through 2015 are as follows:

In millions	As of June  30, 2011
July 1, 2011 through December 31, 2011	$	21.9
2012	$	28.8
2013	$	27.5
2014	$	25.7
2015	$	23.9

(12) Stockholders’ Equity

The following table presents the change in total stockholders’ equity for the six months ended June 30, 2011:

In millions	MEMC Stockholders’ Equity		Noncontrolling Interest			Total
Balance, January 1, 2011	$	2,251.7	$	43.9		$	2,295.6
Net income		42.8		14.3			57.1
Other comprehensive income, net of tax		40.7		4.3			45.0
Stock issued for SunEdison contingent consideration		24.5		—			24.5
Stock plans, net		18.1		—			18.1
Distributions to noncontrolling interest		—		(13.9	)		(13.9	)
Balance, June 30, 2011	$	2,377.8	$	48.6		$	2,426.4

On February 1, 2011 we issued 2.1 million shares to SunEdison’s former unit holders as part of the contingent consideration pursuant to the terms of the acquisition agreement.

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. We issue new shares to satisfy stock option exercises. As of June 30, 2011, there were 10.2 million shares authorized for future grant under these plans. Options to employees are generally granted upon hire and annually or semi-annually, usually with four-year vesting, although certain grants have three, four or five-year cliff vesting. No option has a term of more than 10 years. Under our current equity plans, the exercise price of stock options granted equals the market price on the date of the grant.

17

The following table presents information regarding outstanding stock options as of June 30, 2011 and changes during the six months then ended with regard to stock options:

	Shares			Weighted- Average Exercise Price		Aggregate Intrinsic  Value (in millions)		Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2010		13,259,245		$	21.88
Granted		4,233,683			11.83
Exercised		(10,033	)		8.73
Forfeited		(84,142	)		12.53
Expired		(31,359	)		27.78
Outstanding at June 30, 2011		17,367,394		$	19.48	$	0.25		8
Options exercisable at June 30, 2011		5,831,677		$	28.61	$	0.22		6

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 2011 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 June 30, 2011. This amount can change based on the fair market value of our stock. For the six months ended June 30, 2011 and June 30, 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.

Our weighted-average assumptions are as follows:

	Six Months Ended			Six Months Ended
	June 30, 2011			June 30, 2010
Risk-free interest rate		1.7	%		2.2	%
Expected stock price volatility		65.7	%		67.5	%
Expected term until exercise (years)		5			4
Expected dividends		0.0	%		0.0	%

The weighted-average grant-date fair value per share of options granted was $6.30 and $7.71 for the six months ended June 30, 2011 and 2010, respectively. As of June 30, 2011, $48.8 million of total unrecognized compensation cost related to stock options granted and outstanding as of June 30, 2011 is expected to be recognized over a weighted-average period of 2.9 years.

Restricted stock units represent the right to receive a share of MEMC stock at a designated time in the future, provided the stock unit is vested at the time. The following table presents information regarding outstanding restricted stock units as of June 30, 2011 and changes during the six months then ended:

	Restricted  Stock Units			Aggregate  Intrinsic Value (in millions)		Weighted Average  Remaining Contractual Life
Outstanding at December 31, 2010		4,017,290
Granted		2,168,198
Converted		(683,417	)
Forfeited		(114,926	)
Outstanding at June 30, 2011		5,387,145		$	49.1		3

At June 30, 2011, there were no restricted stock units that were currently convertible into shares. The weighted-average fair value of restricted stock units per share on the date of grant was $11.41 and $15.65 for the six months ended June 30, 2011 and June 30, 2010, respectively. As of June 30, 2011, $31.9 million of total unrecognized compensation cost related to restricted stock units is expected to be recognized over a weighted-average period of 2.8 years.

18

Stock-based compensation expense for the three months ended June 30, 2011 and June 30, 2010 was $7.1 million and $11.6 million, net of income tax benefit of $4.1 million and $6.4 million, respectively. For the six months ended June 30, 2011 and June 30, 2010, stock-based compensation expense was $13.2 million and $18.4 million, net of income tax benefit of $7.6 million and $10.2 million, respectively.

(13) Income Taxes

In general, we record income tax expense each quarter based on our best estimate as to the full year’s effective tax rate. This estimated tax expense is reported based on a pro-ration of the actual income earned in the period divided by the full year forecasted income. There are certain items, however, which are given discrete period treatment and the tax effects of those items are reported in the quarter that such event arises. Items that give rise to discrete recognition include (but are not limited to) finalizing tax authority examinations, changes in statutory tax rates and expiration of a statute of limitations.

The process for calculating income tax expense includes estimating current taxes due and assessing temporary differences between the recognition of assets and liabilities for tax and financial statement reporting purposes. We regularly review our deferred tax assets for realizability, taking into consideration all available evidence, both positive and negative, including historical pre-tax and taxable income (losses), projected future pre-tax and taxable income (losses), the expected timing of the reversals of existing temporary differences and tax planning strategies. We presently have a three year cumulative loss in the U.S. for income tax accounting purposes and are relying upon projected future pre-tax and taxable income of our restructured U.S. operations and tax planning strategies in determining the realization of the deferred tax assets. The tax planning strategies include altering the timing and amount of payments from non-U.S. subsidiaries to our U.S. operations. Of the cash, cash equivalents, and short-term investments at June 30, 2011, approximately $297.4 million was held by our foreign subsidiaries and are subject to repatriation tax effects. Reliance on these strategies resulted in the determination that an additional $7.2 million of deferred tax assets would be realized with a corresponding reduction of a valuation allowance on the U.S. deferred tax assets. In arriving at these judgments, the weight given to the potential effect of all positive and negative evidence is commensurate with the extent to which it can be objectively verified. The total deferred tax assets as of June 30, 2011 and December 31, 2010 were $245.4 million and $172.7 million, respectively.

We are subject to income taxes in the United States and numerous foreign jurisdictions. From time to time, we are subject to income tax audits in these jurisdictions. We believe that our tax return positions are fully supported, but tax authorities are likely to challenge certain positions, which may not be fully sustained. Our income tax expense includes amounts intended to satisfy income tax assessments that may result from these challenges. Determining the income tax expense for these potential assessments and recording the related assets and liabilities requires significant judgments and estimates. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. We review our liabilities quarterly, and we may adjust such liabilities due to proposed assessments by tax authorities, changes in facts and circumstances, issuance of new regulations or new case law, negotiations between tax authorities of different countries concerning our transfer prices, the resolution of entire audits, or the expiration of statutes of limitations. Adjustments, if required, are most likely to occur in the year during which major audits are closed. The total reserve for uncertain tax positions increased $13.1 million during the six months ended June 30, 2011 due to tax benefits claimed by certain foreign subsidiaries. A majority of these exposures relate to timing differences and accordingly, the offset was primarily recorded to deferred taxes. The total reserve for uncertain tax positions as of June 30, 2011 and December 31, 2010 were $45.2 million and $32.1 million, respectively.

We are currently under examination by the IRS for the 2008 and 2009 tax years. Additionally, due to the carryback of our 2009 net operating loss for utilization against the 2007 tax liability, the IRS has re-opened the 2007 tax year for further review. We believe 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 estimable at this time.

19

(14) Variable Interest Entities

We are the primary beneficiary of four variable interest entities (“VIEs”) in solar energy projects that we consolidate as of June 30, 2011, all of which existed and were consolidated by the Company as of December 31, 2010. During the six months ended June 30, 2011, four solar energy system project companies that were consolidated as of December 31, 2010 were sold and deconsolidated. The carrying amounts and classification of our consolidated VIEs’ assets and liabilities included in our consolidated financial statements are as follows:

In millions	As of June 30,  2011		As of December 31,  2010
Current assets	$	43.9	$	173.0
Noncurrent assets		62.9		63.1
Total assets	$	106.8	$	236.1
Current liabilities	$	9.8	$	38.5
Noncurrent liabilities		87.3		107.8
Total liabilities	$	97.1	$	146.3

The amounts shown in the table above exclude intercompany balances which are eliminated upon consolidation. All of the assets in the table above are restricted for settlement of the VIE obligations and all of the liabilities in the table above can only be settled using VIE resources.

(15) Deferred Revenue and Profit

Deferred revenue and profit consists of the following:

In millions	As of June 30, 2011		As of December 31, 2010
Deferred revenue and profit for solar energy systems:
Short-term deposits on solar energy systems	$	27.8	$	8.8
Profit deferrals on solar energy system sales		99.4		63.2
Deferred subsidy revenue		13.3		11.8
Total solar energy system deferred revenue	$	140.5	$	83.8
Semiconductor and Solar Materials deferred revenue:
Short-term deferred revenue		27.0		—
Long-term deferred revenue		52.7		115.2
Total Semiconductor and Solar Materials deferred revenue	$	79.7	$	115.2
Total deferred revenue	$	220.2	$	199.0

On June 30, 2011, we resolved our long-term solar wafer supply agreement with Suntech Power Holdings Co., Ltd. (“Suntech”). Under the terms of the supply agreement, which was originally signed in July 2006, MEMC was to supply solar wafers to Suntech over a 10-year period, with pre-determined pricing, on a take-or-pay basis beginning in January 2007. As part of the original supply agreement, Suntech advanced funds to MEMC in the form of a security deposit. As part of a separate agreement, MEMC also received a warrant to purchase up to a 4.99% equity stake in Suntech. Suntech has agreed to fulfill its contractual take-or-pay commitment to MEMC for $120.0 million for product delivered and to be delivered by MEMC. The consideration was comprised of the retention by MEMC of $53.0 million of cash previously deposited by Suntech under the supply agreement and currently held by MEMC, and a commitment to pay $67.0 million in four equal installments in July 2011, October 2011, January 2012, and April 2012. MEMC received the first payment in July 2011 and the collectability on the remaining balance is considered reasonably assured. Suntech has also committed to establish an irrevocable letter of credit for the benefit of MEMC for the remaining three payments. The letter of credit is to have no drawing conditions other than the passage of time. MEMC has retained the Suntech warrant originally issued to MEMC in July 2006, which had a related unamortized balance recorded in deferred revenues of $56.4 million prior to the resolution of the long-term solar wafer supply agreement. These three components totaled $176.4 million, of which $149.4 million was recorded to revenue during the second quarter of 2011 and $27.0 million was deferred. The deferred revenue will be recognized as revenue as we complete our remaining performance commitments scheduled to be completed by December 31, 2011. The retention of the deposit in satisfaction of the take or pay requirement has been classified as an operating cash inflow in the statement of cash flows.

20

(16) Commitments and Contingencies

Purchase Obligations

We maintain long-term agreements with multiple suppliers in connection with the purchase of certain raw materials and long-term agreements with multiple subcontractors to manufacture solar wafers for us. We have provided refundable deposits to these suppliers of $55.8 million and $88.7 million as of June 30, 2011 and December 31, 2010, respectively. These deposits are refundable to the extent we fulfill our minimum take-or-pay requirements.

During the quarter ended June 30, 2011, a $52.4 million charge was recorded to cost of goods sold related to the estimated probable shortfall to our purchase obligations associated with certain take-or-pay agreements we have with suppliers for raw materials. It is possible that there may be additional losses in the future which could be material; however, such amounts are not reasonably estimable at this time. In addition, we have also entered into foreign currency forwards to hedge against the fluctuation of foreign currencies related to these future purchases. Because it is no longer probable that we will execute these foreign currency denominated transactions, the contracts are no longer considered cash flow hedges for accounting purposes. Accordingly, we have recorded a gain on hedges of $14.2 million to other income during the quarter ended June 30, 2011.

Contingent Consideration

Contingent consideration was due to the former SunEdison unit holders if certain operational criteria were met from January 1, 2010 through December 31, 2010. As of December 31, 2010, we recorded $80.2 million of contingent consideration, which was the maximum payout under the acquisition agreement. This liability was paid on February 1, 2011 through a combination of $55.7 million in cash and the issuance of 2.1 million shares of MEMC common stock.

Contingent consideration may also be due to the former Solaicx shareholders if certain operational criteria are met from July 1, 2010 through December 31, 2011. The amount payable is based on Solaicx achieving revenues of at least $60.0 million during such time period, up to a maximum revenue target of $71.8 million, with the payout on a linear basis between those two amounts. This would entitle the former Solaicx shareholders to up to an additional $27.6 million of a combination of cash and MEMC common stock, with the number of shares fixed at the date of the acquisition agreement. As of June 30, 2011, the range of outcomes and the assumptions used to develop the estimates has changed since the date of the acquisition. During the three months ended June 30, 2011, due to a decline in MEMC’s stock price, the liability was reduced by $7.0 million to the current balance of $19.9 million based on the estimated fair value of the contingent consideration as of June 30, 2011. Future revisions to the estimated fair value of the contingent consideration could be material to the statement of operations.

Contingent consideration was recorded in connection with two entities acquired by SunEdison during 2011. The amount payable in cash is based on the entity achieving specific milestones in the development, installation, and interconnection of solar energy systems. As of June 30, 2011, the amount payable was $31.1 million. Future revisions to the estimated fair value of the contingent consideration could be material.

Commitments

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 June 30, 2011.

We generally warrant the operation of our solar energy systems for a period of time. Certain parts and labor warranties from our vendors can be assigned to our customers. 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 June 30, 2011. We may also indemnify our customers for tax credits associated with the systems we construct and sell and then leaseback. During the six months ended June 30, 2011, we made additional payments under the terms of the lease agreements to indemnify our sale leaseback customers for approximately $6.7 million for shortfalls in amounts approved by the U.S. Treasury Department related to the Grant in Lieu program tax credits. We are working with our sale leaseback customers and the U.S. Treasury Department to recover these shortfalls. We believe additional exposures to such payments are not probable and/or estimable as of June 30, 2011.

21

In connection with certain contracts to sell outright solar energy systems or as sale leasebacks, SunEdison has guaranteed the systems’ performance for various time periods following the date of interconnection. Also, under a separate operations and maintenance services agreement, SunEdison guaranteed the uptime availability of the system over the term of the arrangement, which may last 20 years. To the extent there are shortfalls in either of the guarantees, SunEdison is required to indemnify the purchaser up to the guaranteed amount through a cash payment. The maximum losses that SunEdison may be subject to for non-performance are contractually limited by the terms of each executed agreement.

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.

S.O.I.TEC Silicon on Insulator Technologies S.A. v. MEMC Electronic Materials, Inc.

On May 19, 2008, Soitec and Commissariat A L’Energie 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. Soitec and CEA filed an amended complaint on July 21, 2009, adding a fourth, related patent to the lawsuit. MEMC filed a counterclaim against Soitec for infringement of one of MEMC’s U.S. patents. The Court bifurcated the case into two phases, a first liability phase, which, to the extent liability is found, will be followed by a second damages phase. In a memorandum opinion dated October 13, 2010, the Court found that all of MEMC’s current products and processes do not infringe any valid claim of the four asserted Soitec patents.

The Court held a jury trial from October 25, 2010 to November 2, 2010. After the Court’s October 13, 2010 ruling in favor of MEMC, the only remaining claim that Soitec continued to assert at trial was a single patent claim directed against some mono-implant research and development efforts conducted by MEMC approximately four to six years ago, none of which have occurred since 2006, and none of which are material or relevant to the current operations at MEMC. MEMC continued to assert at trial its counterclaim for infringement of MEMC’s patent. On November 2, 2010, the jury found that certain of Soitec’s wafers infringed the patent asserted by MEMC at trial. The jury also found that one of the Soitec patent claims was valid. This single patent claim covers MEMC’s mono-implant research and development efforts that ended in 2006. On July 13, 2011, the court denied all post trial motions. MEMC expects to appeal certain of the Court’s rulings in this matter. The damages phase of this trial will likely occur after any appeals by MEMC or Soitec in the case. We believe that Soitec and CEA’s suit against us has no merit, and we are asserting a vigorous defense against these claims, as well as our infringement counterclaim. Although it is not possible to predict the outcome of such matters, we believe that the ultimate outcome of this proceeding will not have a material adverse effect on our financial position, cash flows or results of operations.

Semi-Materials Co., Ltd. v. MEMC Electronic Materials, Inc. and MEMC Pasadena, Inc.

On September 28, 2006, Semi-Materials Co., Ltd. (“Semi-Materials”) filed a complaint against MEMC in the U.S. District Court for the Eastern District of Missouri (Case No. 4:06-CV-01426-FRB) alleging breach of contract, unjust enrichment, fraud, and conversion, and seeking specific performance, all related to a series of purchase orders for chunk polysilicon and polysilicon solar ingot. This litigation resulted in a trial which commenced on February 22, 2011. On March 2, 2011, the jury found for MEMC on the fraud and unjust enrichment claims made by Semi-Materials against the Company. The jury found for Semi-Materials on the breach of contract claim, awarding damages to Semi-Materials of $19.0 million. Approximately $5.1 million of this amount relates to an amount previously recorded by MEMC. MEMC believes that the jury award was calculated not based on the actual harm suffered by Semi-Materials for the alleged failed deliveries, but based on the difference between the price under the alleged 2005 purchase orders and the price of polysilicon in November 2006 (after polysilicon prices had risen substantially throughout 2006). MEMC has filed a post-trial motion for judgment as a matter of law attacking the verdict on various bases including the damage amount awarded (as MEMC believes the damages do not accurately measure any damages suffered by Semi-Materials and results in a windfall to Semi-Materials). Semi-Materials has filed a post-trial motion seeking prejudgment interest. Both post-trial motions are fully briefed and the Court is expected to rule on the motions in the coming weeks. MEMC intends to appeal the case to the Eighth Circuit. The appellate deadlines will be determined based upon the Court’s disposition of the parties’ post-trial motions. During the first quarter of 2011, MEMC recorded $13.9 million to marketing and administration expenses as a result of the jury verdict pending the appeal.

22

On March 31, 2008, Semi-Materials and its affiliate SMC Shanghai (“SMC”) filed two additional lawsuits against MEMC, one in the United States District Court for the Southern District of Texas (Case No. 4:08-CV-00991) (the “Texas Action”) and another in the United States District Court for the Eastern District of Missouri (Case No. 4:08-CV-00434-JCH) (the “Missouri Action”). In both cases, Semi-Materials and SMC alleged that: (i) MEMC Pasadena, Inc. (“MEMC Pasadena”) breached an agreement with SMC for SMC to act as MEMC’s exclusive sales agent in China; (ii) MEMC Pasadena breached an agreement with Semi-Materials for Semi-Materials to act as MEMC Pasadena’s exclusive sales agent in Korea; (iii) MEMC tortiously interfered with the purported sales agency agreements among MEMC Pasadena and SMC and Semi-Materials; and (iv) MEMC tortiously interfered with a separate sales agency agreement Semi-Materials claimed existed with an unrelated party. In the Missouri Action, Semi-Materials also claimed that MEMC tortiously interfered with an expectancy for an on-going business relationship Semi-Materials claimed existed with the un-related party. Upon MEMC’s motions for summary judgment in the Missouri Action, the Court dismissed the claim that MEMC tortiously interfered with the purported sales agency agreements, and a claim that MEMC tortiously interfered with an alleged sales agency agreement between Semi-Materials and the unrelated party. The remaining claims were tried before a jury between January 4 and January 12, 2010. At trial, the jury found in favor of Semi-Materials and SMC on their respective claims for breach of contract against MEMC Pasadena, awarding a verdict of $0.2 million, and found in favor of MEMC on Semi-Materials’ claim for tortious interference with an expectancy of an ongoing business relationship with the unrelated party. MEMC Pasadena filed a post-trial motion for judgment as a matter of law as to the breach of contract claims on which the jury found in favor of Semi-Materials and SMC, which the Court denied. Semi-Materials and SMC filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit concerning rulings the Court made at summary judgment concerning the plaintiffs’ alleged damages on their breach of contract claims. MEMC Pasadena filed a notice of cross-appeal concerning the Court’s entry of judgment based upon the jury verdict and the Court’s denial of MEMC’s motion for judgment as a matter of law. The oral argument in this appeal occurred on April 11, 2011. No discovery has been undertaken in the Texas Action, and it has been stayed.

We do not believe that the Semi-Materials cases, in whole or in part, will have a material adverse effect on us. Due to uncertainty regarding the litigation process, the outcome of these matters are unpredictable, damages could be substantial, and the results of these cases could be unfavorable for MEMC.

Minneapolis Firefighters’ Relief Association v. MEMC Electronic Materials, Inc., et al.

On September 26, 2008, a putative class action lawsuit was filed in the U.S. District Court for the Eastern District of Missouri by plaintiff Minneapolis Firefighters’ Relief Association asserting claims against MEMC and Nabeel Gareeb, MEMC’s former Chief Executive Officer. On October 10, 2008, a substantially similar putative class action lawsuit was filed by plaintiff Donald Jameson against MEMC, Mr. Gareeb and Ken Hannah, MEMC’s former Chief Financial Officer and currently MEMC’s Executive Vice President and President—Solar Materials. These cases purportedly were brought on behalf of all persons who acquired shares of MEMC’s common stock between June 13, 2008 and July 23, 2008, inclusive (the “Class Period”). Both complaints alleged that, during the Class Period, MEMC failed to disclose certain material facts regarding MEMC’s operations and performance, which had the effect of artificially inflating MEMC’s stock price in violation of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Plaintiffs further alleged that Messrs. Gareeb and Hannah are subject to liability under Section 20(a) of the Act as control persons of MEMC. Plaintiffs sought certification of the putative class, unspecified compensatory damages, interest and costs, as well as ancillary relief. On December 12, 2008, these actions were consolidated, and the Court appointed Mahendra A. Patel as lead plaintiff. Plaintiff filed a consolidated amended complaint on February 23, 2009. Defendants filed a motion to dismiss the consolidated amended complaint, which was fully briefed by the parties by June 24, 2009. On March 8, 2010, the Court dismissed the consolidated class action complaint with prejudice. On March 31, 2010, plaintiff filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit. Oral argument for this appeal occurred on April 12, 2011. On June 17, 2011, the United States Court of Appeals for the Eighth Circuit affirmed the dismissal with prejudice.

Brian Larkowski v. John Marren, et al.

On November 4, 2008, Brian Larkowski, a purported shareholder of MEMC, filed a derivative action in the Circuit Court of St. Charles County, Missouri against defendants John Marren, Peter Blackmore, Nabeel Gareeb, Marshall Turner, Robert J. Boehlke, C. Douglas Marsh, William E. Stevens, James B. Williams and Michael McNamara (collectively “individual defendants”) and MEMC as a nominal defendant.

Each individual defendant is a current or former officer and/or director of MEMC. The lawsuit alleges breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment, based on allegations of conduct similar to that alleged in the putative class action lawsuit described above. On December 19, 2008, the court entered a stipulated order staying the derivative action pending resolution of any motions to dismiss in the putative class action described above. On June 16, 2011, the Court continued the stay. On July 22, 2011, the plaintiff voluntarily dismissed the action without prejudice.

Jerry Jones v. MEMC Electronic Materials, Inc., et al.

On December 26, 2008, a putative class action lawsuit was filed in the U.S. District Court for the Eastern District of Missouri by plaintiff, Jerry Jones, purportedly on behalf of all participants in and beneficiaries of MEMC’s 401(k) Savings Plan (the “Plan”) between September 4, 2007 and December 26, 2008, inclusive. The complaint asserted claims against MEMC and certain of its directors, employees and/or other unnamed fiduciaries of the Plan. The complaint alleges that the defendants breached certain fiduciary duties owed under the Employee Retirement Income Security Act (“ERISA”), generally asserting that the defendants failed to make full disclosure to the Plan’s participants of the risks of investing in MEMC’s stock and that the Company’s stock should not have been made available as an investment alternative in the Plan. The misstatements alleged in the complaint significantly overlap with the misstatements alleged in the federal securities class action described above.

23

On June 1, 2009, an amended class action complaint was filed by Mr. Jones and another purported participant of the Plan, Manuel Acosta, which raises substantially the same claims and is based on substantially the same allegations as the original complaint. However, the amended complaint changes the period of time covered by the action, purporting to be brought on behalf of beneficiaries of and/or participants in the Plan from June 13, 2008 through the present, inclusive (the “Class Period”). The amended complaint seeks unspecified monetary damages, including losses the participants and beneficiaries of the Plan allegedly experienced due to their investment through the Plan in MEMC’s stock, equitable relief and an award of attorney’s fees. No class has been certified and discovery has not begun. The Company and the named directors and employees filed a motion to dismiss the complaint, which was fully briefed by the parties as of October 9, 2009. The parties each subsequently filed notices of supplemental authority and corresponding responses. On March 17, 2010, the court denied the motion to dismiss. The MEMC defendants filed a motion for reconsideration or, in the alternative, certification for interlocutory appeal, which was fully briefed by the parties as of June 16, 2010. The parties each subsequently filed notices of supplemental authority and corresponding responses. On October 18, 2010, the court granted the MEMC defendants’ motion for reconsideration, vacated its order denying the MEMC defendants’ motion to dismiss, and stated that it will revisit the issues raised in the motion to dismiss after the parties supplement their arguments relating thereto. Both parties filed briefs supplementing their arguments on November 1, 2010, and the parties each subsequently filed additional notices of supplemental authority. On June 28, 2011, plaintiff Jerry Jones filed a notice of voluntary withdrawal from the action. On June 29, 2011, the Court entered an order withdrawing Jones as one of the plaintiffs in this action.

MEMC believes the above remaining ERISA class action is without merit and we will assert a vigorous defense. Due to the inherent uncertainties of litigation, we cannot predict the ultimate outcome or resolution of the foregoing class action proceedings or estimate the amounts of, or potential range of, loss with respect to these proceedings. An unfavorable outcome could have a material adverse impact on our business, results of operations and financial condition. We have indemnification agreements with each of our present and former directors and officers, under which we are generally required to indemnify each such director or officer against expenses, including attorney’s fees, judgments, fines and settlements, arising from actions such as the lawsuits described above (subject to certain exceptions, as described in the indemnification agreements).

From time to time we may conclude it is in the best interests of our stockholders, employees, vendors and customers to settle one or more litigation matters, and any such settlement could include substantial payments; however, other than as may be noted above, we have not reached this conclusion with respect to any particular matter at this time. There are a variety of factors that influence our decision to settle any particular individual matter, and the amount we may choose to pay or accept as payment to settle such matters, including the strength of our case, developments in the litigation (both expected and unexpected), the behavior of other interested parties, including non-parties to the matter, the demand on management time and the possible distraction of our employees associated with the case and/or the possibility that we may be subject to an injunction or other equitable remedy. It is difficult to predict whether a settlement is possible, the amount of an appropriate settlement or when is the opportune time to settle a matter in light of the numerous factors that go into the settlement decision.

24

(17) Reportable Segments

	Three Months Ended June  30,						Six Months Ended June 30,
In millions	2011			2010			2011			2010
Net sales:
Semiconductor Materials	$	275.3		$	249.6		$	526.8		$	468.9
Solar Materials		323.1			168.0			649.4			325.7
Solar Energy		147.2			30.7			305.3			91.4
Consolidated net sales	$	745.6		$	448.3		$	1,481.5		$	886.0
Operating income (loss):
Semiconductor Materials	$	3.4		$	24.3		$	11.8		$	16.4
Solar Materials		89.2			19.1			128.6			31.3
Solar Energy		(8.4	)		(4.4	)		(15.0	)		2.4
Corporate and other		(32.5	)		(35.7	)		(73.9	)		(62.1	)
Consolidated operating income (loss)	$	51.7		$	3.3		$	51.5		$	(12.0	)
Interest expense (income):
Semiconductor Materials	$	(0.5	)	$	0.2		$	(0.7	)	$	0.3
Solar Materials		1.8			—			1.1			0.1
Solar Energy		7.1			4.9			12.2			16.0
Corporate and other		12.8			0.9			17.6			1.7
Consolidated net interest expense	$	21.2		$	6.0		$	30.2		$	18.1
Depreciation and amortization:
Semiconductor Materials	$	31.0		$	26.2		$	61.6		$	52.5
Solar Materials		17.3			7.3			29.7			14.2
Solar Energy		7.3			5.1			13.3			9.4
Consolidated depreciation and amortization	$	55.6		$	38.6		$	104.6		$	76.1
Capital expenditures:
Semiconductor Materials	$	34.0		$	31.6		$	84.7		$	50.5
Solar Materials		65.2			62.9			219.5			90.2
Solar Energy(1)		175.3			67.1			228.3			112.0
Corporate and other		2.3			0.1			2.3			0.1
Consolidated capital expenditures	$	276.8		$	161.7		$	534.8		$	252.8

⁽¹⁾ Consists primarily of construction of solar energy systems of $174.1 million and $226.7 million in the three and six-months ended June 30, 2011, respectively, and $66.8 million and $111.7 million in the three and six-months ended June 30, 2010, respectively.

During the three months ended June 30, 2011, there was $149.4 million of revenue recognized in the Solar Materials segment as part of the Suntech wafer supply contract resolution (see Note 15). Additionally, the Solar Materials segment charged $52.4 million to cost of goods sold related to the estimated probable shortfall to our purchase obligations associated with take-or-pay agreements we have with suppliers for raw materials. No similar amounts were recorded in prior periods.

Restructuring and impairment costs for the three and six months ended June 30, 2011 were $13.6 million and $13.8 million, respectively. Of these restructuring and impairment costs, $8.1 million was recorded to the Semiconductor Materials segment, $4.2 million was recorded to the Solar Energy segment, and $1.3 million was recorded to the Solar Materials segment in the three months ended June 30, 2011. The additional $0.2 million for the six months ended June 30, 2011 was recorded to the Semiconductor Materials segment. All 2010 restructuring expenses were recorded to the Semiconductor Materials segment.

25

Equity in earnings of joint venture, net of tax of $3.3 million in the six months ended June 30, 2011 relates to the joint venture with Zhenjiang Huantai JV and is part of our Solar Materials segment. Equity in earnings of joint venture, net of tax of $7.3 million in the six months ended June 30, 2010 relates to the joint venture with Q-Cells and is part of our Solar Materials segment.

Due to the earthquake in Japan on March 11, 2011, our semiconductor wafer production in Japan was suspended from that time through April 12, 2011. Because of the unplanned downtime and damages to the plant, we recorded $23.5 million as period charges to the Semiconductor Materials segment operating margin, with $15.8 million recorded to cost of goods sold due to the under absorption of costs, inventory adjustments, and asset impairment charges. We had no similar adjustments during the first six months of 2010.

Approximately $13.1 million of expenses were recorded in the Corporate segment, related to legal cases during the quarter ended March 31, 2011. Because the business decision resulting in this litigation affected multiple segments, these expenses were recorded to Corporate and other. The remaining portion of expenses recorded to Corporate included stock compensation expense, general corporate marketing and administration costs, research and development administration costs, legal and tax professional services and related costs, and other personnel costs not reflected in the operating segments.

The Solar Energy and Solar Materials segments include $348.5 million and $56.4 million of goodwill, respectively. We have recorded no impairment on the goodwill.

During the second quarter of 2010, we received $11.9 million in net insurance proceeds from our business interruption lost profits claim related to the disruption in production at our Pasadena, Texas facility as a result of Hurricane Ike in 2008. Of this amount, $8.0 million was recorded to our Semiconductor Materials segment and $3.9 million was recorded to our Solar Materials segment. No similar transactions occurred during the first six months of 2011.

(18) Unaudited Condensed Consolidating Financial Information

On March 10, 2011, we issued $550.0 million of 7.75% Senior Notes due April 1, 2019 (the “Original Notes”). The Original Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the sale of the Original Notes, the Company entered into a Registration Rights Agreement with the initial purchasers of the Original Notes party thereto, pursuant to which the Company and the Subsidiary Guarantors (as defined below) agreed to file a registration statement with respect to an offer to exchange the Original Notes for a new issue of substantially identical notes registered under the Securities Act (the “Exchange Notes” and together with the Original Notes, the “Notes”). The Original Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain wholly-owned domestic subsidiaries of the Company (the “Subsidiary Guarantors”).

The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(d) of Regulation S-X promulgated under the Securities Act, presents the unaudited condensed consolidating financial information separately for:

i. The Company, as the issuer of the 2019 Notes;

ii. The Subsidiary Guarantors, on a combined basis;

iii. The Company’s other subsidiaries, on a combined basis, which are not guarantors of the 2019 Notes (the “Subsidiary Non-Guarantors”);

iv. Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Company, the Subsidiary Guarantors and the Subsidiary Non-Guarantors, (b) eliminate the investments in the Company’s subsidiaries and (c) record consolidating entries; and

v. The Company and its subsidiaries on a consolidated basis.

26

Unaudited Condensed Consolidating Statement of Operations

For the three months ended June 30, 2011

(In millions, except per share data)

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	232.1		$	111.4		$	1,057.5		$	(655.4	)	$	745.6
Cost of goods sold		236.2			99.2			876.9			(647.8	)		564.5
Gross margin		(4.1	)		12.2			180.6			(7.6	)		181.1
Operating expenses:
Marketing and administration		37.1			20.5			36.4			—			94.0
Research and development		15.6			2.1			4.1			—			21.8
Restructuring and impairment charges		6.5			0.4			6.7			—			13.6
Operating (loss) income		(63.3	)		(10.8	)		133.4			(7.6	)		51.7
Non-operating (income) expense:
Interest expense		11.1			0.2			9.5			0.4			21.2
Interest income		(0.1	)		(0.2	)		(0.2	)		(0.4	)		(0.9	)
Decline in fair value of warrant		—			—			1.9			—			1.9
Other, net		(12.3	)		(2.1	)		(7.3	)		4.5			(17.2	)
Total non-operating (income) expense		(1.3	)		(2.1	)		3.9			4.5			5.0
(Loss) income before income tax (benefit) expense, equity in (loss) earnings of joint venture and investment in subsidiary earnings		(62.0	)		(8.7	)		129.5			(12.1	)		46.7
Income tax (benefit) expense		(30.5	)		13.2			19.5			(1.3	)		0.9
(Loss) income before equity in (loss) earnings of joint venture and investment in subsidiary earnings		(31.5	)		(21.9	)		110.0			(10.8	)		45.8
Investment in subsidiary earnings		78.9			95.2			—			(174.1	)		—
Equity in (loss) earnings of joint venture, net of tax		(0.1	)		—			2.1			—			2.0
Net income		47.3			73.3			112.1			(184.9	)		47.8
Net loss (income) attributable to noncontrolling interests		—			0.1			(0.6	)		—			(0.5	)
Net income attributable to MEMC stockholders	$	47.3		$	73.4		$	111.5		$	(184.9	)	$	47.3

27

Unaudited Condensed Consolidating Statement of Operations

For the three months ended June 30, 2010

(In millions, except per share data)

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	209.7		$	87.7		$	508.3		$	(357.4	)	$	448.3
Cost of goods sold		207.5			73.0			438.0			(347.1	)		371.4
Gross profit		2.2			14.7			70.3			(10.3	)		76.9
Operating expenses:
Marketing and administration		34.6			13.8			24.2			—			72.6
Research and development		8.1			1.1			2.3			—			11.5
Restructuring charges		1.4			—			—			—			1.4
Insurance recovery		—			(11.9	)		—			—			(11.9	)
Operating (loss) income		(41.9	)		11.7			43.8			(10.3	)		3.3
Non-operating (income) expense:
Interest expense		(0.5	)		1.1			6.2			(0.8	)		6.0
Interest income		—			(0.9	)		(1.7	)		0.8			(1.8	)
Decline in fair value of warrant		—			—			6.8			—			6.8
Other, net		(24.3	)		0.4			8.3			8.6			(7.0	)
Total non-operating (income) expense		(24.8	)		0.6			19.6			8.6			4.0
(Loss) income before income tax (benefit) expense and investment in subsidiary earnings (loss)		(17.1	)		11.1			24.2			(18.9	)		(0.7	)
Income tax (benefit) expense		(13.7	)		(4.6	)		4.6			(2.4	)		(16.1	)
(Loss) income before investment in subsidiary earnings (loss)		(3.4	)		15.7			19.6			(16.5	)		15.4
Investment in subsidiary earnings (loss)		17.2			(5.4	)		—			(11.8	)		—
Net income		13.8			10.3			19.6			(28.3	)		15.4
Net income attributable to noncontrolling interests		—			(0.3	)		(1.3	)		—			(1.6	)
Net income attributable to MEMC stockholders	$	13.8		$	10.0		$	18.3		$	(28.3	)	$	13.8

28

Unaudited Condensed Consolidating Statement of Operations

For the six months ended June 30, 2011

(In millions, except per share data)

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	440.4		$	252.2		$	1,947.6		$	(1,158.7	)	$	1,481.5
Cost of goods sold		452.3			244.6			1,627.0			(1,137.5	)		1,186.4
Gross margin		(11.9	)		7.6			320.6			(21.2	)		295.1
Operating expenses:
Marketing and administration		81.8			43.0			62.2			—			187.0
Research and development		30.8			4.2			7.8			—			42.8
Restructuring and impairment charges		6.7			0.4			6.7			—			13.8
Operating (loss) income		(131.2	)		(40.0	)		243.9			(21.2	)		51.5
Non-operating (income) expense:
Interest expense		14.3			0.6			16.0			(0.7	)		30.2
Interest income		(0.2	)		(0.4	)		(1.9	)		0.7			(1.8	)
Decline in fair value of warrant		—			—			0.3			—			0.3
Other, net		(22.7	)		(1.3	)		(0.2	)		6.6			(17.6	)
Total non-operating (income) expense		(8.6	)		(1.1	)		14.2			6.6			11.1
(Loss) income before income tax (benefit) expense, equity in earnings of joint venture and investment in subsidiary earnings		(122.6	)		(38.9	)		229.7			(27.8	)		40.4
Income tax (benefit) expense		(44.7	)		0.9			31.3			(0.9	)		(13.4	)
(Loss) income before equity in (loss) earnings of joint venture and investment in subsidiary earnings		(77.9	)		(39.8	)		198.4			(26.9	)		53.8
Investment in subsidiary earnings		120.8			112.4			—			(233.2	)		—
Equity in (loss) earnings of joint venture, net of tax		(0.1	)		—			3.4			—			3.3
Net income		42.8			72.6			201.8			(260.1	)		57.1
Net loss (income) attributable to noncontrolling interests		—			0.1			(14.4	)		—			(14.3	)
Net income attributable to MEMC stockholders	$	42.8		$	72.7		$	187.4		$	(260.1	)	$	42.8

29

Unaudited Condensed Consolidating Statement of Operations

For the six months ended June 30, 2010

(In millions, except per share data)

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	408.3		$	168.2		$	1,010.5		$	(701.0	)	$	886.0
Cost of goods sold		405.5			150.7			882.1			(688.5	)		749.8
Gross profit		2.8			17.5			128.4			(12.5	)		136.2
Operating expenses:
Marketing and administration		63.4			28.4			43.0			—			134.8
Research and development		16.3			1.9			4.4			—			22.6
Restructuring charges		2.7			—			—			—			2.7
Insurance recovery		—			(11.9	)		—			—			(11.9	)
Operating (loss) income		(79.6	)		(0.9	)		81.0			(12.5	)		(12.0	)
Non-operating (income) expense:
Interest expense		(1.1	)		2.3			19.4			(2.5	)		18.1
Interest income		(0.1	)		(2.4	)		(4.1	)		2.5			(4.1	)
Decline in fair value of warrant		—			—			12.1			—			12.1
Other, net		(28.8	)		0.3			13.1			9.0			(6.4	)
Total non-operating (income) expense		(30.0	)		0.2			40.5			9.0			19.7
(Loss) income before income tax benefit, equity in (loss) earnings of joint venture and investment in subsidiary earnings (loss)		(49.6	)		(1.1	)		40.5			(21.5	)		(31.7	)
Income tax (benefit) expense		(31.2	)		(4.1	)		8.0			(3.4	)		(30.7	)
(Loss) income before equity in (loss) earnings of joint venture and investment in subsidiary earnings (loss)		(18.4	)		3.0			32.5			(18.1	)		(1.0	)
Investment in subsidiary earnings (loss)		24.1			(8.5	)		—			(15.6	)		—
Equity in (loss) earnings of joint venture, net of tax		(1.5	)		—			8.8			—			7.3
Net income (loss)		4.2			(5.5	)		41.3			(33.7	)		6.3
Net income attributable to noncontrolling interests		—			(0.3	)		(1.8	)		—			(2.1	)
Net income (loss) attributable to MEMC stockholders	$	4.2		$	(5.8	)	$	39.5		$	(33.7	)	$	4.2

30

Unaudited Condensed Consolidating Balance Sheet

June 30, 2011

(In millions, except per share data)

	MEMC, Inc		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	209.8	$	17.3		$	424.8	$	—		$	651.9
Restricted cash		—		0.5			37.6		—			38.1
Accounts receivable, net		72.3		15.2			185.4					272.9
Inventories		44.5		107.7			274.5		(91.3	)		335.4
Solar energy systems held for development and sale		—		43.3			197.5		(14.3	)		226.5
Income taxes receivable		19.2		—			6.4		—			25.6
Prepaid and other current assets		22.5		6.0			240.7		—			269.2
Total current assets		368.3		190.0			1,366.9		(105.6	)		1,819.6
Investments		2.8		5.0			137.4					145.2
Investments in subsidiaries		1,878.5		1,018.1			—		(2,896.6	)		—
Property, plant and equipment, net:
Semiconductor and Solar Materials, net		83.2		325.3			1,298.6		(29.6	)		1,677.5
Solar energy systems, net		—		49.2			590.0		100.8			740.0
Deferred tax assets, net		138.2		(27.7	)		100.8		—			211.3
Restricted cash		—		0.2			19.8		—			20.0
Other assets		41.6		25.3			161.9		—			228.8
Goodwill		—		342.7			62.2		—			404.9
Intangible assets, net		—		46.9			3.2		—			50.1
Total assets	$	2,512.6	$	1,975.0		$	3,740.8	$	(2,931.0	)	$	5,297.4

31

Unaudited Condensed Consolidating Balance Sheet

June 30, 2011

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	—		$	2.0		$	8.7		$	—		$	10.7
Short-term solar energy system financing, current portion of solar energy system financing and capital lease obligations		—			0.2			58.8			—			59.0
Accounts payable		19.8			81.2			507.4			—			608.4
Accrued liabilities		67.5			28.3			84.8			—			180.6
Contingent consideration related to acquisitions		—			46.0			5.0			—			51.0
Accrued wages and salaries		15.7			11.9			29.9			—			57.5
Deferred revenue for solar energy systems		—			5.8			22.0			—			27.8
Customer deposits		4.2			0.6			55.4			—			60.2
Intercompany (receivable) payable and short term notes		(411.9	)		414.6			(2.7	)		—			—
Income taxes payable		(16.1	)		(4.5	)		100.8			—			80.2
Total current liabilities		(320.8	)		586.1			870.1			—			1,135.4
Long-term debt and capital lease obligations, less current portion		550.0			—			91.5			—			641.5
Long-term solar energy system financing and capital lease obligations, less current portion		—			1.9			691.3			—			693.2
Pension and post-employment liabilities		24.2			—			31.9			—			56.1
Deferred revenue for solar energy systems		—			1.0			111.7			—			112.7
Semiconductor and Solar Materials deferred revenue		—			—			52.7			—			52.7
Long-term intercompany note (receivable) payable		(163.1	)		(24.6	)		187.7			—			—
Other liabilities		44.5			5.5			129.4			—			179.4
Total liabilities		134.8			569.9			2,166.3			—			2,871.0
Total MEMC stockholders’ equity		2,377.8			1,405.1			1,525.9			(2,931.0	)		2,377.8
Noncontrolling interests		—			—			48.6			—			48.6
Total stockholders’ equity		2,377.8			1,405.1			1,574.5			(2,931.0	)		2,426.4
Total liabilities and stockholders’ equity	$	2,512.6		$	1,975.0		$	3,740.8		$	(2,931.0	)	$	5,297.4

32

Unaudited Condensed Consolidating Balance Sheet

December 31, 2010

(In millions, except per share data)

	MEMC, Inc		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	15.5	$	7.2		$	684.6	$	—		$	707.3
Restricted cash		10.7		0.5			32.6		—			43.8
Accounts receivable, net		87.5		8.0			200.5		—			296.0
Inventories		33.3		59.0			163.2		(40.9	)		214.6
Solar energy systems held for development and sale		—		8.6			235.8		(6.9	)		237.5
Income taxes receivable		16.7		17.4			1.5		—			35.6
Prepaid and other current assets		19.0		9.2			174.3		—			202.5
Total current assets		182.7		109.9			1,492.5		(47.8	)		1,737.3
Investments		2.3		15.4			95.0		(2.4	)		110.3
Investments in subsidiaries		1,758.8		911.5			—		(2,670.3	)		—
Property, plant and equipment, net:
Semiconductor and Solar Materials, net		78.5		328.7			1,083.4		(24.7	)		1,465.9
Solar energy systems, net		—		4.2			511.9		51.5			567.6
Deferred tax assets, net		138.1		(27.7	)		28.9		—			139.3
Restricted cash		—		0.2			18.5		—			18.7
Other assets		25.2		19.9			132.5		—			177.6
Goodwill		—		342.7			—		—			342.7
Intangible assets, net		—		52.5			—		—			52.5
Total assets	$	2,185.6	$	1,757.3		$	3,362.7	$	(2.693.7	)	$	4,611.9

33

Unaudited Condensed Consolidating Balance Sheet

December 31, 2010

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	—		$	2.8		$	3.6		$	—		$	6.4
Short-term solar energy system financing, current portion of solar energy system financing and capital lease obligations		—			0.3			65.4			—			65.7
Accounts payable		20.9			115.9			608.7			—			745.5
Accrued liabilities		44.9			39.3			81.2			—			165.4
Contingent consideration related to acquisitions		—			106.4			—			—			106.4
Accrued wages and salaries		15.6			9.3			25.5			—			50.4
Deferred revenue for solar energy systems		—			—			8.8			—			8.8
Customer deposits		0.1			0.6			92.2			—			92.9
Intercompany (receivable) payable and short-term notes		(93.9	)		131.9			(38.0	)		—			—
Income taxes payable		11.0			(14.0	)		45.6			—			42.6
Total current liabilities		(1.4	)		392.5			893.0			—			1,284.1
Long-term debt and capital lease obligations, less current portion		—			—			20.5			—			20.5
Long-term solar energy system financing and capital lease obligations, less current portion		—			3.9			586.2			—			590.1
Pension and post-employment liabilities		28.6			—			25.5			—			54.1
Deferred revenue for solar energy systems		—			0.7			74.3			—			75.0
Semiconductor and Solar Materials deferred revenue		—			—			115.2			—			115.2
Long-term intercompany note (receivable) payable		(125.2	)		(23.6	)		148.8			—			—
Other liabilities		31.9			2.8			142.6			—			177.3
Total liabilities		(66.1	)		376.3			2,006.1			—			2,316.3
Total MEMC stockholders’ equity		2,251.7			1,381.0			1,312.7			(2,693.7	)		2,251.7
Noncontrolling interests		—			—			43.9			—			43.9
Total stockholders’ equity		2,251.7			1,381.0			1,356.6			(2,693.7	)		2,295.6
Total liabilities and stockholders’ equity	$	2,185.6		$	1,757.3		$	3,362.7		$	(2,693.7	)	$	4,611.9

34

Unaudited Condensed Consolidating Statement of Cash Flows

For the six months ended June 30, 2011

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	(332.3	)		24.2			183.5			98.2		$	(26.4	)
Cash flows from investing activities:
Purchases of cost and equity method investments		(0.5	)		(5.0	)		(43.8	)		—			(49.3	)
Capital expenditures		(14.4	)		(16.0	)		(277.7	)		—			(308.1	)
Construction of solar energy systems		—			—			(122.5	)		(104.2	)		(226.7	)
Restricted cash		—			—			(15.9	)		—			(15.9	)
Proceeds from sale of property, plant and equipment		—			—			37.1			—			37.1
Cash paid for acquisition, net of cash acquired		—			(28.7	)					—			(28.7	)
Payments to vendors for deposits and loans		—			(14.4	)		(4.4	)		—			(18.8	)
Equity infusions or investments in subsidiaries		—			—			—			—			—
Proceeds from return of equity method investments		—			13.7			—			—			13.7
Other		1.0			0.4			(8.0	)		6.0			(0.6	)
Net cash used in investing activities		(13.9	)		(50.0	)		(435.2	)		(98.2	)		(597.3	)
Cash flows from financing activities:
Senior notes issuance		550.0			—			—			—			550.0
Net repayments of customer deposits related to long-term supply agreements		—			(0.9	)		(50.3	)		—			(51.2	)
Cash paid for SunEdison acquisition contingent consideration		—			(50.2	)		—			—			(50.2	)
Collection on (repayments of) intercompany debt		11.2			88.9			(100.1	)		—			—
Principal payments on long term debt		—			—			(1.8	)		—			(1.8	)
Proceeds from financing obligations		—			—			217.6			—			217.6
Repayments of financing and capital lease obligations		—			(1.8	)		(65.1	)		—			(66.9	)
Common stock repurchased		(2.7	)		—			—			—			(2.7	)
Return of investment and dividends to noncontrolling interest		—			—			(15.2	)		—			(15.2	)
Debt financing fees		(18.0	)		—			(5.4	)		—			(23.4	)
Net cash provided by (used in) financing activities		540.5			36.0			(20.3	)		—			556.2
Effect of exchange rate changes on cash and cash equivalents		—			(0.1	)		12.2			—			12.1
Net increase (decrease) in cash and cash equivalents		194.3			10.1			(259.8	)		—			(55.4	)
Cash and cash equivalents at beginning of period		15.5			7.2			684.6			—			707.3
Cash and cash equivalents at end of period	$	209.8		$	17.3		$	424.8		$	—		$	651.9

35

Unaudited Condensed Consolidating Statement of Cash Flows

For the six months ended June 30, 2010

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	15.4		$	(2.0	)	$	(83.7	)	$	79.0		$	8.7
Cash flows from investing activities:
Proceeds from sale and maturities of investments		—			—			146.8			—			146.8
Capital expenditures		(11.0	)		(13.2	)		(116.9	)		—			(141.1	)
Construction of solar energy systems		—			(1.3	)		(24.1	)		(86.3	)		(111.7	)
Purchases of cost and equity method investments		—			—			(10.0	)		—			(10.0	)
Payments to vendors for deposits and loans		—			—			(28.0	)		—			(28.0	)
Proceeds from return of equity method investments		77.6			—			—			—			77.6
Cash received from net investment hedge		18.5			—			—			—			18.5
Equity infusions or investments in subsidiaries		1.1			0.9			(2.0	)		—			—
Restricted cash		—			(0.3	)		6.3			—			6.0
Other		8.6			0.7			(13.9	)		7.3			2.7
Net cash provided by (used in) investing activities		94.8			(13.2	)		(41.8	)		(79.0	)		(39.2	)
Cash flows from financing activities:
Net repayments of customer deposits related to long-term supply agreements		—			—			(27.7	)		—			(27.7	)
(Repayments of) collections on intercompany debt		(15.4	)		(16.6	)		32.0			—			(0.0	)
Principal payments on long-term debt		—			—			(3.0	)		—			(3.0	)
Proceeds from financing obligations		—			—			106.6			—			106.6
Repayments of financing and capital lease obligations		—			(1.1	)		(14.7	)		—			(15.8	)
Proceeds from noncontrolling interests		—			—			9.7			—			9.7
Common stock repurchased		(0.3	)		—			—			—			(0.3	)
Debt financing fees		(0.1	)		—			(8.9	)		—			(9.0	)
Net cash (used in) provided by financing activities		(15.8	)		(17.7	)		94.0			—			60.5
Effect of exchange rate changes on cash and cash equivalents		(0.1	)		—			(9.6	)		—			(9.7	)
Net increase (decrease) in cash and cash equivalents		94.3			(32.9	)		(41.1	)		—			20.3
Cash and cash equivalents at beginning of period		105.9			49.7			477.1			—			632.7
Cash and cash equivalents at end of period	$	200.2		$	16.8		$	436.0		$	—		$	653.0

36

(19) Subsequent Events

On August 3, 2011, MEMC reached a definitive agreement to acquire privately held Fotowatio Renewable Ventures, Inc. (“FRV U.S.”), a developer of solar power projects. MEMC will pay at closing approximately $112.0 million, plus the assumption and repayment of approximately $1.9 million in intercompany loans and approximately $21.0 million in intercompany capital contributions. The final purchase price is subject to adjustment based on the actual amount of intercompany loans and capital contributions at closing. The agreement also includes an earn-out provision of up to $103.6 million should FRV U.S. achieve certain performance targets which may affect the GAAP purchase price. The acquisition is expected to close in the third or fourth quarter of 2011, subject to customary closing conditions, including the receipt of regulatory approvals.

37

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto of MEMC Electronic Materials, Inc. included herein.

Business

MEMC is a global leader in the development, manufacture, and sale of silicon wafers, and with the acquisition of SunEdison in 2009, a major developer and seller of photovoltaic energy solutions. MEMC is organized by end market, with three business segments: Semiconductor Materials, Solar Materials, and Solar Energy. Semiconductor Materials provides silicon wafers ranging from 100 millimeter (4 inch) to 300 millimeter (12 inch) as the base material for semiconductor devices. Solar Materials sells silicon wafers, primarily 156 millimeter, for solar applications. Depending on market conditions, MEMC may also sell intermediate silicon products such as polysilicon and silane to solar cell manufacturers, flat panel display producers, or other markets. During the first quarter of 2011, MEMC engaged a contract manufacturer to begin production of solar modules to be used in our Solar Energy segment. MEMC’s Solar Energy segment (SunEdison) designs, develops, installs, finances and monitors solar energy systems and facilitates the sale of solar generated electricity. Through SunEdison, MEMC is one of the world’s leading developers of solar energy projects and, we believe, one of the most geographically diverse. MEMC’s technology leadership in silicon and downstream solar are enabling the company to expand its customer base and lower costs throughout the silicon supply chain.

OVERVIEW

Semiconductor Materials Segment

In our Semiconductor Materials segment, the Utsunomiya, Japan facility resumed limited shipments of its 300mm products and resumed production on qualified process tools in early April 2011, while continuing to inspect, qualify and ramp additional equipment. This facility had been affected by the 9.0 magnitude earthquake that occurred on March 11, 2011. Production yield on operating tools is now comparable to pre-earthquake levels, raw material availability has been good, and power availability is stable. Pre-earthquake 300mm production levels in the facility were achieved by May 2, 2011. The facility’s small volume of 200mm wafer capacity, previously scheduled to be moved to our Ipoh, Malaysia site during the third quarter of 2011, is now in the process of being moved ahead of the original schedule. A majority of the customers of the facility are not in Japan and did not have their operations directly affected.

Solar Materials Segment

During the second quarter of 2011, the Solar Materials segment saw significant declines in the average selling price per wafer. We also experienced reduced volumes in the three month period ending June 30, 2011 as compared to the three month period ending March 31, 2011. This has caused considerable pressure on our revenue and gross profit during the three month period ending June 30, 2011 as well as our year to date performance in this segment. In response to these adverse changes in the operating environment for this segment, we have been assessing our current long-term wafer supply and take-or-pay agreements with our customers and suppliers and taking actions where appropriate. While we believe prices have stabilized in the third quarter, we do not expect prices to return to previous levels.

As part of our response to the changes in the operating environment, we terminated our wafer supply agreement with Suntech Power Holdings, Co., Ltd. (“Suntech”) on June 30, 2011. Under the terms of the Suntech supply agreement, which was originally signed in July 2006, MEMC was to supply solar wafers to Suntech over a 10-year period, with pre-determined pricing, on a take-or-pay basis. Suntech has agreed to fulfill its contractual take-or-pay commitment to MEMC for $120.0 million for product delivered and to be delivered by MEMC. The consideration was comprised of the retention by MEMC of $53.0 million of cash previously deposited by Suntech under the supply agreement and currently held by MEMC, and a commitment to pay $67.0 million in four equal installments in July 2011, October 2011, January 2012, and April 2012. MEMC received the first payment in July 2011. Suntech has also committed to establish an irrevocable letter of credit for the benefit of MEMC for the remaining three payments. The letter of credit is to have no drawing conditions other than the passage of time. MEMC has retained the Suntech warrant originally issued to MEMC in July 2006, which had a related unamortized balance recorded in deferred revenues of $56.4 million prior to the resolution of the long-term solar wafer supply agreement. These actions resulted in the recognition of $149.4 million in revenue during the second quarter. We expect that we will continue to sell solar wafers to Suntech through the remainder of 2011; however, there are no contractual requirements thereafter. We continue to diversify and expand our portfolio of solar wafer customers as well as our internal consumption of solar wafers for our SunEdison business.

38

In addition, based on our future forecasted needs from our suppliers of certain raw materials, we have determined we will no longer purchase to the full extent under the contracts for certain of our take-or-pay supply agreements. During the second quarter of 2011, we recorded a $52.4 million charge to cost of goods sold related to the estimated probable shortfall to our purchase obligations associated with these take-or-pay agreements. We have estimated these losses based on our forecast needs for these raw materials given information currently available. The extent of these losses could materially change based on actual requirements in the future. It is possible that there may be additional losses in the future which could be material; however, such amounts are not reasonably estimable at this time. We had entered into foreign currency forwards to hedge against the fluctuation of foreign currencies related to these future purchases. These currency forwards have been liquidated in third quarter. Because it is no longer probable that we will execute these foreign currency denominated transactions, we have also recorded a gain on hedges of $14.2 million to other income during the second quarter.

During the first quarter of 2011, we initiated solar wafer manufacturing at our facility in Kuching, Malaysia. Production at the Kuching facility will continue to ramp during 2011, which we expect will lessen our dependence on third party wafer manufacturers. We continue to experience unfavorable production variances due to the plant’s continued ramp and recorded charges of approximately $14.2 million in the quarter ended June 30, 2011 primarily related to these low volumes.

Solar Energy Segment (SunEdison)

Our SunEdison segment recognized direct sales of seven projects totaling 23.4 megawatts (“MW”), of which five projects totaling 22.6MW were sold in Europe. SunEdison also entered into new master lease agreements and completed sale-leaseback transactions under new and existing agreements totaling 3.9MW in the United States during the second quarter. SunEdison continues to see softening in demand in Europe primarily due to recent feed-in-tariff reductions in several European countries.

As of June 30, 2011, the Solar Energy segment had a project pipeline of approximately 2.5 gigawatts, which includes projects under construction totaling 160MW. The increase in pipeline from the first quarter of 2011, which partly came from acquisitions, is largely driven by utility scale projects in the United States and emerging Asian markets. Given shifts in governmental policies and economic conditions, we have continued to diversify our pipeline with a majority of new pipeline in developed North America markets and an increased proportion in promising emerging markets. A solar energy system project will be classified as “pipeline” where SunEdison has a signed or awarded power purchase agreement (PPA) or other energy off-take agreement or has achieved each of the following three items: site control, an identified interconnection point with an estimate of the interconnection costs, and an executed energy off-take agreement or the determination that there is a reasonable likelihood that an energy off-take agreement will be signed. “Under construction” refers to projects within pipeline, in various stages of completion, which are not yet operational.

RESULTS OF OPERATIONS

Net sales by segment in the three and six months ended June 30, 2011 and June 30, 2010 were as follows:

	Three Months Ended June  30,				Six Months Ended June  30,
Net Sales	2011		2010		2011		2010
Dollars in millions
Semiconductor Materials	$	275.3	$	249.6	$	526.8	$	468.9
Solar Materials		323.1		168.0		649.4		325.7
Solar Energy		147.2		30.7		305.3		91.4
Total Net Sales	$	745.6	$	448.3	$	1,481.5	$	886.0

Semiconductor Materials Segment Net Sales

The increase in Semiconductor Materials net sales in the second quarter of 2011 compared to the prior year was the result of price increases of $15.5 million, volume increases of $7.6 million and improved product mix of $2.4 million. Price increases occurred across all wafer diameters while the volume increase was primarily in 200mm and 300mm wafers. The increase in net sales during the year to date period was principally due to price increases of $44.2 million. Sales volumes were negatively impacted in the six months ended June 30, 2011 due to the earthquake in Japan. Our semiconductor wafer average selling prices in the three and six months ended June 30, 2011 were approximately 7% and 11% higher, respectively, than the semiconductor wafer average selling prices for the same periods in 2010.

39

Solar Materials Segment Net Sales

The increase in Solar Materials net sales in the second quarter of 2011 of $155.1 million compared to the prior year was primarily due to the recognition of $149.4 million of revenue from the Suntech supply contract resolution. Excluding this item, revenues year over year were relatively flat as increased volumes were offset by price declines. For the year to date period, the increase in net sales was attributable to the Suntech contract resolution and increases in wafer volumes of $141.5 million of which $120.5 million occurred in the first quarter of 2011 prior to the downturn in the market. Our solar wafer average selling prices in the three and six months ended

June 30, 2011 were approximately 13.9% lower and 1.2% higher, respectively, than the solar wafer average selling prices for the same periods in 2010.

Solar Energy Segment (SunEdison) Net Sales

The increase in Solar Energy net sales in the second quarter of 2011 was primarily the result of the sale of seven solar energy systems totaling 23.4 megawatts during the second quarter of 2011, compared to three sales totaling three megawatts during the second quarter of 2010. Net sales for the second quarter of 2011 also included revenues of $21.7 million from energy production as compared to $14.1 million in the second quarter of 2010.

Solar Energy segment net sales do not include financing sale leasebacks with contract sales values of $23.0 million in the second quarter of 2011 and $8.0 million in the second quarter of 2010, which transactions result in the retention of assets on our balance sheet along with the related non-recourse debt. See “Critical Accounting Policies” within our 2010 annual report on Form 10-K.

	Three Months Ended June  30,						Six Months Ended June  30,
Gross Profit	2011			2010			2011			2010
Dollars in millions
Cost of Goods Sold	$	564.5		$	371.4		$	1,186.4		$	749.8
Gross Profit		181.1			76.9			295.1			136.2
Gross Margin Percentage		24.3	%		17.2	%		19.9	%		15.4	%

The increase in our gross profit dollars and gross margin percentage for the quarter and year-to-date periods ended June 30, 2011 was primarily the result of the $149.4 million in revenue recognized from the Suntech agreement to fulfill their obligation to the long-term supply agreement. This was partially offset by the $52.4 million charge recorded to cost of goods sold related to the estimated probable shortfall to our purchase obligations associated with take-or-pay agreements in the Solar Materials segment. The additional increases in the gross profit dollars and gross margin percentage for the year-to-date periods ended June 30, 2011 were the result of Solar Materials volume increases and Semiconductor Materials volume and price increases, which were partially offset by the $15.8 million in charges taken in first and second quarter related to the Japan earthquake as well as the previously mentioned solar wafer charges due to lower production volumes in our Solar Materials segment. We expect gross profit in the near term to improve due to the curtailment of unfavorable earthquake related charges. However, gross profit in the near term will be unfavorably impacted due to recent declines in selling prices.

	Three Months Ended June 30,						Six Months Ended June 30,
Marketing and Administration	2011			2010			2011			2010
Dollars in millions
Marketing and Administration	$	94.0		$	72.6		$	187.0		$	134.8
As a Percentage of Net Sales		12.6	%		16.2	%		12.6	%		15.2	%

The increase in marketing and administration expenses for the three and six months ended June 30, 2011 resulted from the increase in SunEdison costs of $19.0 million and $29.3 million, respectively, related to the continued investment in staffing, infrastructure and project development to support continued investment in the growth of that business. The increase in the six month period was also due to charges of $13.1 million in the first quarter of 2011 related to net legal verdicts and settlements. The increase in the three months ended June 30, 2011 also relates to $7.0 million of incremental costs incurred as a consequence of the Japan earthquake that were expensed as incurred, which was offset by the favorable fair value adjustment on the Solaicx contingent consideration of $7.0 million. The remaining increase in the six months ended June 30, 2011 relates to employee costs and professional services as a result of the increase in Corporate and Solar Materials segments’ overhead.

	Three Months Ended June 30,						Six Months Ended June 30,
Research and Development	2011			2010			2011			2010
Dollars in millions
Research and Development	$	21.8		$	11.5		$	42.8		$	22.6
As a Percentage of Net Sales		2.9	%		2.6	%		2.9	%		2.6	%

R&D expenses consist mainly of product and process development efforts to increase our capabilities in each of our business units. The increases in R&D expenses for the quarter and year-to-date periods ended June 30, 2011 compared to the same period in the prior year are due to new efforts for emerging technologies included primarily in the Solar Materials segment. Overall R&D expenses have increased slightly as a percentage of net sales.

40

	Three Months Ended June  30,						Six Months Ended June  30,
Restructuring Costs	2011			2010			2011			2010
Dollars in millions
Restructuring and Impairment Charges	$	13.6		$	1.4		$	13.8		$	2.7
As a Percentage of Net Sales		1.8	%		0.3	%		0.9	%		0.3	%

During June 2011, MEMC committed to actions to reduce overall manufacturing costs across its global sites as well as realign certain general and administrative expenses due to various industry and customer specific developments (“2011 Global Plan”). These actions include relocating certain operations as well as reductions in headcount. During the quarter ended June 30, 2011, we recorded $6.8 million and $3.2 million in restructuring and impairment charges, respectively, for our 2011 Global Plan, which did not occur in the prior year. The remaining charges relate to the 2009 Global Plan (see Note 2, Restructuring and Impairment Charges, above), including $2.9 million of contract termination costs in the second quarter of 2011, which did not occur in the same 2010 period.

	Three Months Ended June  30,					Six Months Ended June  30,
Insurance Recovery	2011		2010			2011		2010
Dollars in millions
Insurance Recovery	$	—	$	(11.9	)	$	—	$	(11.9	)
As a Percentage of Net Sales		—		2.7	%		—		1.3	%

During the second quarter of 2010, we received $11.9 million in net insurance proceeds from our business interruption lost profits claim related to the disruption in production at our Pasadena, Texas facility as a result of Hurricane Ike in 2008. Of this amount, $8.0 million was recorded to our Semiconductor Materials segment and $3.9 million was recorded to our Solar Materials segment based on the amount of polysilicon used in each of the segments.

	Three Months Ended June 30,						Six Months Ended June 30,
Operating Income (Loss)	2011			2010			2011			2010
Dollars in millions
Semiconductor Materials	$	3.4		$	24.3		$	11.8		$	16.4
Solar Materials		89.2			19.1			128.6			31.3
Solar Energy		(8.4	)		(4.4	)		(15.0	)		2.4
Corporate and other		(32.5	)		(35.7	)		(73.9	)		(62.1	)
Total Operating Income (Loss)	$	51.7		$	3.3		$	51.5		$	(12.0	)

During the three months ended June 30, 2011, our consolidated operating income of approximately $51.7 million represented an improvement of $48.4 million from the comparable period in 2010. Our operating income of $51.5 million for the six months ended June 30, 2011 was an improvement of $63.5 million compared with the same period in the prior year. These improvements were the net results of the changes in gross profit dollars and operating costs discussed above.

Semiconductor Materials Segment

The decrease in our Semiconductor Materials operating income from $24.3 million in the second quarter of 2010 to $3.4 million in the second quarter of 2011 was the result of $14.2 million of unabsorbed production costs and incremental costs incurred as a consequence of the Japan earthquake and increased restructuring expenses of $6.7 million, primarily under the 2011 Global Plan. Operating margin was also unfavorably impacted due to lost sales during the period the Japan plant was not operational. The decrease in operating income for the six months ended June 30, 2011, when compared to the same period in 2010, was the result of Japan earthquake charges of $23.5 million and increased restructuring expenses of $5.6 million. These operating income decreases were offset by price and volume increases.

41

Solar Materials Segment

The increase in our Solar Materials operating income from $19.1 million in the second quarter of 2010 to $89.2 million in the second quarter of 2011 was the result of the Suntech contract resolution revenue of $149.4 million, offset by the recognized take-or-pay obligations for our long-term raw material purchase agreements of $52.4 million. Without the net effects of the Suntech contract resolution and the recognized take-or-pay obligations, this segment would have experienced an operating loss primarily due to recent decreases in average selling price per wafer, slightly offset by volume increases. The year-to-date increases were caused solely by the Suntech contract resolution revenues and the offsetting take-or-pay obligations related to our long-term supply agreements.

Solar Energy Segment (SunEdison)

Our Solar Energy segment had an operating loss of $8.4 million in the second quarter of 2011 compared to a loss of $4.4 million for the second quarter of 2010. The Solar Energy segment’s operating results are highly dependent upon the timing of system sales and revenue recognition requirements related to the terms of sales agreements and type of project finance method utilized, as well as completed and uncompleted projects. Revenue and income recognition in any given period may differ due to the timing of installation, related expenditures, system warranty and indemnity provisions and the type of financing obtained. The operating loss for the second quarter of 2011 was attributable in part to the timing of revenue and profit recognition on direct sale projects for which we received the full contract price, but were unable to record that amount as revenue and margin recognition pursuant to applicable real estate sales accounting requirements. Because of certain production and uptime guarantees, $13.3 million of the total cash proceeds from these sales was deferred and will be recognized as revenue and margin at a later date, net of actual costs, if any, for the guarantees.

Corporate and other

Corporate and other expenses are mainly comprised of substantially all of our stock compensation expense, general corporate marketing and administration costs, research and development administration costs, legal and tax professional services and related costs, salary and other personnel costs, and other items not reflected in the segments. Corporate and other expenses remained consistent in the second quarter of 2011 compared to the second quarter of 2010. The increase of $11.8 million for the year-to-date period ending June 30, 2011, when compared to the same period as the prior year, was primarily due to a charge of $13.1 million related to net legal proceeding verdicts and settlements within the 2011 first quarter. The legal expense recorded to Corporate related to activities and business decisions of the corporate operations.

	Three Months Ended June  30,						Six Months Ended June  30,
Non-operating Expense (Income)	2011			2010			2011			2010
Dollars in millions
Interest expense	$	21.2		$	6.0		$	30.2		$	18.1
Interest income		(0.9	)		(1.8	)		(1.8	)		(4.1	)
Decline in fair value of warrant		1.9			6.8			0.3			12.1
Other, net		(17.2	)		(7.0	)		(17.6	)		(6.4	)
Total Non-operating Expense	$	5.0		$	4.0		$	11.1		$	19.7

During the three months ended June 30, 2011, we incurred interest expense of $10.7 million related to the issuance of our 2019 Notes during the first quarter of 2011, as discussed in Liquidity and Capital Resources below. The remaining interest expense relates primarily to debt and capital leases for solar energy systems. For the three months ended June 30, 2011 and June 30, 2010, we recorded $7.1 million, net of capitalized interest of $1.4 million, and $5.0 million of interest expense, respectively, to the Solar Energy Segment. For the six months ended June 30, 2011 and June 30, 2010, we recorded $12.2 million, net of capitalized interest of $2.4 million, and $16.0 million of interest expense, respectively, to the Solar Energy Segment. Of the $16.0 million recorded in the Solar Energy segment in 2010, $6.6 million relates to deferred financing fees that were charged to interest expense when previously incurred solar energy system debt was transferred to the buyer upon sale of the system.

The change in fair value of warrant represents the mark-to-market adjustment for a warrant received from a customer, Suntech. We recorded a decrease in the estimated fair value of the warrant of $1.9 million in the second quarter of 2011 compared to a decrease in fair value of $6.8 million in the same period of 2010. The change in the estimated fair value of the warrant is primarily driven by the change in the price of Suntech’s ordinary shares, which had a price per share of $7.87 and $8.01 at June 30, 2011 and December 31, 2010, respectively.

42

The increase in other, net for the quarter and year-to-date periods ended June 30, 2011, was primarily the result of a gain on Euro based forward contracts of $14.2 million. The increase also related to a gain of $2.9 million from the sale of SunEdison’s 9.9% interest in our partnership with First Reserve.

	Three Months Ended June  30,						Six Months Ended June  30,
Income Taxes	2011			2010			2011			2010
Dollars in millions
Income Tax Expense (Benefit)	$	0.9		$	(16.1	)	$	(13.4	)	$	(30.7	)
Income Tax Rate as a % of Income before Income Taxes		1.9	%		2,300.0	%		(33.2	%)		96.8	%

During the three months ended June 30, 2011, we recorded an income tax expense of $0.9 million and an effective tax rate of 1.9% compared to an income tax benefit of $16.1 million and an effective tax rate of 2,300.0% for the three months ended June 30, 2010. The income tax expense for the second quarter of 2011 is primarily attributed to a deferred taxable loss in the U.S. and reduction of our valuation allowance 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 foreseeable future periods to absorb the loss.

We are currently under examination by the IRS for the 2008 and 2009 tax years. Additionally, due to the carryback of our 2009 net operating loss for utilization against the 2007 tax liability, the IRS has re-opened the 2007 tax year for additional review. We believe 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.

We believe our tax positions are in compliance with applicable tax laws and regulations. We routinely review our estimates for uncertain tax positions. 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 tax liabilities and, therefore, could have a material impact on our tax provision, net income, tax liabilities and cash flows.

	Three Months Ended June  30,				Six Months Ended June  30,
Equity in Earnings of Joint Venture, Net of Tax	2011		2010		2011		2010
Dollars in millions
Equity in earnings of joint venture, net of tax	$	2.0	$	—	$	3.3	$	7.3

For the three months ended June 30, 2011, the equity in earnings of joint venture, net of tax of $2.0 million, relates to our Zhenjiang Huantai joint venture. The decrease in equity in earnings of joint venture, net of tax for the six months ended June, 2011 compared to the same period in the prior year was due to the winddown of our joint venture with Q-Cells SE (“Q-Cells”) in late 2010.

	Three Months Ended June  30,						Six Months Ended June  30,
Net income attributable to noncontrolling interests	2011			2010			2011			2010
Dollars in millions
Net income attributable to noncontrolling interests	$	(0.5	)	$	(1.6	)	$	(14.3	)	$	(2.1	)

For the six months ended June 30, 2011, the net income attributable to noncontrolling interests of $14.3 million primarily related to the profits paid to the partners of certain solar energy systems of $13.8 million in the first quarter of 2011, which did not occur in the same period in the prior year.

FINANCIAL CONDITION

Cash and cash equivalents decreased $55.4 million from $707.3 million at December 31, 2010 to $651.9 million at June 30, 2011. See additional discussion in Liquidity and Capital Resources below.

Our inventories increased $120.8 million to $335.4 million at June 30, 2011 from $214.6 million at December 31, 2010. Inventories primarily increased as a result of building solar wafer inventories and to a lesser extent, an increase in module inventory for solar energy system projects which are expected to be constructed over the next three to nine months. The remaining increases are a result of the continued ramp of Solaicx and our solar wafer plant in Kuching, Malaysia.

43

Prepaid, deposits and other current assets increased from $202.5 million at December 31, 2010 to $269.2 million at June 30, 2011. This increase was mainly attributed to the receivable of $67.0 million due from Suntech as part of the contract resolution.

Long-term investments of $145.2 million at June 30, 2011 increased $34.9 million from $110.3 million at December 31, 2010. The increase was largely due to our additional investment of $17.8 million in the Zhenjiang Huantai joint venture and our investment in the Samsung Fine Chemicals joint venture of $13.8 million.

Our net property, plant and equipment, including our consolidated VIEs, increased $384.0 million to $2,417.5 million at June 30, 2011 from $2,033.5 million at December 31, 2010. This increase was primarily due to capital expenditures of $308.1 million and the construction of solar energy systems of $226.7 million that we expect will be financing sale-leasebacks or held systems which will remain as property, plant and equipment and will generate electricity revenues in the future. Of the total capital expenditures, $102.1 million relates to payments made for prior year expenditures that were in accounts payable as of December 31, 2010. The remaining capital expenditures related to expansions at our plants in Merano, Italy; Pasadena, Texas; and Hsinchu, Taiwan, as well as the construction of our plant in Kuching, Malaysia. These increases were partially offset by depreciation expense of $104.6 million, with the remaining difference due to the capitalization of leased assets of $76.9 million in the second quarter of 2011 and foreign currency changes. Included in property, plant and equipment is $99.9 million in net capital leases related to the Solar Energy segment at June 30, 2011.

Our net deferred tax assets totaled $245.4 million at June 30, 2011 compared to $172.7 million at December 31, 2010. The increase of $72.7 million in net deferred tax assets is primarily attributed to a future tax benefit of $53.0 million associated with deferred revenues of a certain subsidiary, a reduction of a valuation allowance of $7.2 million and other worldwide future tax benefits of $23.5 million, offset by a tax expense of $11.0 million associated with a planned remittance of the undistributed earnings of one of our foreign wholly owned subsidiaries to the United States in the foreseeable future.

Other assets increased $51.2 million to $228.8 million at June 30, 2011 from $177.6 million at December 31, 2010. The increase was related to an increase in debt issuance costs that were deferred as part of the 2019 Notes offering and the amended and restated Corporate Credit Facility totaling $16.5 million. In addition, the increase related to a long-term note receivable of $23.6 million provided to a third party.

Goodwill increased from $342.7 million at December 31, 2010 to $404.9 million at June 30, 2011. This increase was attributable to the acquisitions made by SunEdison in the first and second quarters of 2011, which increased goodwill by $62.2 million. We anticipate reclassifying a portion of the recorded amount of goodwill to intangible assets upon completion of intangible asset valuations.

As of June 30, 2011, MEMC had consolidated goodwill of $404.9 million of which $348.5 and $56.4 million is recorded in the Solar Energy reporting unit and Solar Materials reporting unit, respectively. We evaluate goodwill for impairment on an annual basis on the first day of December each fiscal year, as well as whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the interim period ended June 30, 2011, we evaluated whether events or changes in circumstances occurred which would require a detailed test of goodwill for impairment as of an interim date. As of June 30, 2011, MEMC had a net book value of approximately $2.4 billion and a market capitalization on our common stock of approximately $2.0 billion. During the last month of June 2011 and continuing through July 2011, we have observed a strong correlation between the decline in our market capitalization and the decline in pricing in the solar wafer market. We evaluated the following items, among others, in determining whether there was sufficient evidence of material events or changes in circumstances requiring a detailed test of goodwill impairment as of an interim date: the impact of solar wafer price declines on our raw material costs for our Solar Energy reporting unit; advanced materials technologies at our Solar Materials reporting unit; the financial performance of each reporting unit in fiscal year 2011 to date; and our internal forecast data. Based on the above, we did not believe a detailed test of goodwill impairment was required as of June 30, 2011.

If the current economic conditions or market capitalization of MEMC common stock further declines, impairments to one or more reporting units could occur in future periods and could have a material adverse effect on our financial results. The Company will continue to monitor the recoverability of the carrying value of its goodwill and other long-lived assets.

Long-term debt, short-term debt and capital leases, including our consolidated VIEs, increased to $1,404.4million at June 30, 2011 from $682.7 million at December 31, 2010. This increase of $721.7 million was primarily related to the issuance of $550 million of 2019 Notes on March 10, 2011. The remaining increase was related to solar energy system financing on our financing sale-leaseback transactions that occurred in 2011 and a lease executed in 2008 which was capitalized during the second quarter of 2011 for $77.6 million.

Accounts payable of $745.5 million at December 31, 2010 decreased $137.1 million to $608.4 million at June 30, 2011. Accounts payable decreased primarily due to the payments made on the construction of a large Italian solar energy system that was sold in the fourth quarter of 2010.

Contingent consideration related to acquisitions decreased $55.4 million to $51.0 million at June 30, 2011, from $106.4 million at December 31, 2010. The decrease was mainly the result of the settlement of the SunEdison contingent consideration through a combination of cash and the issuance of MEMC shares of $80.2 million, which was partially offset by the contingent consideration of $31.0 million accrued as part of the acquisitions made by SunEdison during the first and second quarter of 2011.

44

Short-term customer deposits of $92.9 million as of December 31, 2010 decreased $32.7 million to $60.2 million at June 30, 2011. The decrease in short-term customer deposits relates to the release of $30.3 million of short-term deposit as part of the Suntech long term agreement resolution.

Semiconductor and Solar Materials deferred revenue decreased $62.5 million to $52.7 million as of June 30, 2011, from $115.2 million at December 31, 2010. The decrease was the result of the recognition of revenue under the Suntech long term agreement resolution.

Short-term and long-term deferred revenue for solar energy systems increased $56.7 million to $140.5 million at June 30, 2011, from $83.8 million at December 31, 2010. The increase was caused by direct sales of solar energy systems in 2011, which defer profits for certain production and uptime guarantees and will be recognized at a later date. In particular, the direct sale of a 20.4MW solar energy system in Italy in the first quarter of 2011, contributed to $14.3 million of the increase.

The change in accumulated other comprehensive income from $34.1 million at December 31, 2010 to $74.8 million at June 30, 2011 is due primarily to the net translation adjustments recorded as a result of translating to U.S. Dollars the financial statements of our foreign subsidiaries with functional currencies in Euro. In addition, the increase relates to the cash flow hedges that were at a loss position at December 31, 2010 of $8.6 million and were no longer being accounted for under hedge accounting. These hedges were reclassified from accumulated other comprehensive income into earnings during the second quarter of 2011.

LIQUIDITY AND CAPITAL RESOURCES

In the six months ended June 30, 2011, cash used in operating activities was $26.4 million compared to $8.7 million provided by operating activities in the six months ended June 30, 2010. This increase in cash used by operating activities can be attributed to cash outflows from a decline in accounts payable and overall increase in working capital. These outflows were partially offset by inflows from sales of solar energy systems as well as receipts on accounts receivable.

Cash used in investing activities increased to $597.3 million in the six months ended June 30, 2011 compared to $39.2 million used in the six months ended June 30, 2010, primarily as a result of the construction of solar energy systems held on our balance sheet and other capital expenditures. Capital expenditures in the second quarter of 2011 primarily relate to increasing our polysilicon and 300 millimeter capacity, expanding capability for our next generation products in the Semiconductor Materials segment and the construction of our solar wafer manufacturing facility in Kuching, Malaysia. Capital expenditures are expected to continue trending down through the remainder of 2011.

Cash provided by financing activities was $556.2 million in the six months ended June 30, 2011 compared to $60.5 million in the six months ended June 30, 2010. The change in cash provided by financing activities was mainly due to the 2019 Notes described below. There were also net proceeds from solar energy systems financing of $150.7 million. These increases were offset by payments made to noncontrolling interest, as well as debt issuance costs on the 2019 Notes and cash paid in connection with the SunEdison acquisition contingent consideration.

MEMC’s Solar Energy business will require continued access to capital to fund projected growth. During the construction phase of solar energy systems, MEMC typically provides short-term financial support to a project company to fund engineering, procurement and installation cost. Once complete, MEMC either directly sells the project to a third party or obtains more permanent capital on behalf of the project company through debt, sale leaseback, or other financing structures that will typically be secured by the energy producing assets of the project and projected cash flows from energy sale.

The total capital necessary will be driven primarily by the amount of megawatts of energy producing assets installed and interconnected. Our development and construction of solar energy systems are funded primarily through operating cash flows, non-recourse project finance, and our revolving credit facilities. MEMC expects ongoing efforts to secure more capital, including sources of non-recourse construction financing and non-recourse project capital, to generate sufficient resources to support growth. The rate of growth of the Solar Energy segment may be limited by capital access. In the first half of 2011, we raised approximately $218 million of project finance related to our solar energy projects. We anticipate incremental cash needs associated with project finance markets for the second half of 2011 to range from $800 million to $1.1 billion. This range depends on the amount of megawatts ultimately installed and interconnected in 2011.

On August 3, 2011, MEMC reached a definitive agreement to acquire privately held Fotowatio Renewable Ventures, Inc. (“FRV U.S.”), a developer of solar power projects. MEMC will pay at closing approximately $112.0 million, plus the assumption and repayment of approximately $1.9 million in intercompany loans and approximately $21.0 million in intercompany capital contributions. The final purchase price is subject to adjustment based on the actual amount of intercompany loans and capital contributions at closing. The agreement also includes an earn-out provision of up to $103.6 million should FRV U.S. achieve certain performance targets which may affect the GAAP purchase price. The acquisition is expected to close in the third or fourth quarter of 2011, subject to customary closing conditions, including the receipt of regulatory approvals. This acquisition will be funded from our general working capital.

We believe that, based on our current cash and cash equivalents of approximately $651.9 million at June 30, 2011, expected operating cash flows, and the likelihood we will have access to project finance markets, we have the financial resources needed to meet business requirements for at least the next 12 months, including capital expenditures and working capital requirements. In the event we are unable to access project finance markets, we believe we will be able to adjust our operating plans to execute our business plans for at least the next 12 months.

45

We have significant discretion in how we use our cash to pay for capital expenditures, develop solar energy systems, and for other expenses of our business. We evaluate capital expenditure projects and the development of solar energy systems based on their expected strategic impacts and our expected return on investment. If we are not successful in maintaining or increasing our net cash generated by operating activities in the near term or are unable to access project finance, we may use this discretion to decrease our capital expenditures and development of solar energy systems, which may impact our operating results and cash flows for the current and future years. For example, we may defer construction of solar energy systems, look for opportunities to partner with outside investors to finance the development of projects, and scale back our planned investments in solar wafer manufacturing. If we delay the construction of solar energy systems, our operating results will be adversely impacted in the short term.

We continue to look for opportunities to optimize our capital structure, and may also attempt to access the debt or other capital markets at any time we deem conditions favorable; however, unforeseen circumstances may impair or limit our ability to do so on terms that are acceptable to us.

Senior Notes

On March 10, 2011, we issued $550.0 million of 7.75 % Senior Notes due April 1, 2019 (the “2019 Notes”). We incurred $13.8 million in debt issuance costs, which is amortized into the statement of operations over the eight year term. The 2019 Notes were sold at a price equal to 100% of the principal amount thereof. The interest on the 2019 Notes is payable semi-annually, in cash in arrears, on April 1 and October 1, commencing October 1, 2011. We may redeem the 2019 Notes at our option, in whole or in part, at any time on or after April 1, 2014, upon not less than 30 nor more than 60 days’ notice at the redemption prices (expressed as percentages of the principal amount to be redeemed) set forth below, plus any accrued and unpaid interest and additional interest, if any, to the redemption date, if redeemed during the 12-month period beginning on April 1 of the years indicated below.

Year	Price
2014		105.813	%
2015		103.875	%
2016		101.938	%
2017 and thereafter		100.000	%

If a change of control of MEMC occurs, each holder of the 2019 Notes will have the right to require us to repurchase all or any part of that holder’s notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest and additional interest, if any, to the date of the repurchase.

The 2019 Notes were guaranteed by certain of MEMC’s domestic subsidiaries (the “guarantors”). The 2019 Notes are senior unsecured obligations and will be subordinated to all of our and the guarantors’ existing and future secured debt.

The indenture governing the 2019 Notes contains covenants that limit our and certain subsidiaries’ ability, subject to certain exceptions and qualifications, (i) to make certain asset sales, (ii) to make certain restricted payments and investments, (iii) to incur indebtedness and issue preferred stock, (iv) to issue dividends, (v) to make other payments affecting restricted subsidiaries, (vi) to engage in certain transactions with affiliates, and (vii) to merge, consolidate or sell substantially all of our assets. These covenants are subject to a number of qualifications and limitations, and in certain situations, a cross default provision. As of June 30, 2011, we were in compliance with all covenants contained within the indenture governing the 2019 Notes.

In addition, the indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among other things: failure to make payments on the 2019 Notes when due, failure to comply with covenants under the indenture, failure to pay other indebtedness or acceleration of maturity of other indebtedness, failure to satisfy or discharge final judgments and occurrence of bankruptcy events.

Finance and Capital Lease Obligations

We have short-term committed financing arrangements renewable annually of approximately $59.0 million at June 30, 2011, of which there were no short-term borrowings outstanding at June 30, 2011. Of the $59.0 million committed short-term financing arrangements, $37.8 million is unavailable because of the issuance of third party letters of credit. Interest rates are negotiated at the time of the borrowings.

We have additional long-term committed financing arrangements of approximately $1,003.0 million at June 30, 2011, of which $572.3 million is outstanding. Of the $1,003.0 million committed long-term financing arrangements, $125.1 million is unavailable because it relates to the issuance of third party letters of credit. We pay commitment fees of up to 1.0% on the committed loan agreements. Our weighted average cost of borrowing was 6.0% at June 30, 2011 and 3.6% at December 31, 2010.

Our solar energy systems for which we have short-term debt, capital lease and finance obligations are included in separate legal entities. The short-term debt, capital lease and finance obligations of $29.0 million, $118.2 million and $605.0 million, respectively, except for $36.6 million of finance obligations, have recourse to those separate legal entities but no recourse to MEMC or the SunEdison parent under the terms of the applicable agreements. The recourse finance obligations above are collateralized by the related solar energy system assets. These obligations may also include limited guarantees by MEMC or the SunEdison parent related to operations, maintenance and certain indemnities.

46

These solar energy system obligations generally were provided under master lease agreements, which agreements provided financing for solar energy systems that met pre-established master lease criteria. On March 31, 2011, one of SunEdison’s project subsidiaries signed and executed a master lease agreement with a U.S. financial institution which provides for the sale and simultaneous leaseback of certain solar energy systems constructed by SunEdison. The total capacity under this agreement is $120.0 million, of which $112.6 million is available as of June 30, 2011. The specified rental payments will be based on projected cash flows that the solar energy systems will generate. As of June 30, 2011, MEMC has approximately $124.4 million of potential financing available for future solar energy systems under three such master lease agreements, subject to acceptance of specific systems by the master lease trustee.

Corporate Credit Facility

On March 23, 2011, the Company amended and restated its existing Corporate Credit Facility. The amended facility provides for total borrowings of up to $400 million, with the ability to provide for borrowings of up to $550 million in the aggregate (upon terms to be agreed upon by the parties at the time of such request), and has a three year term. While the original Corporate Credit Facility was secured by a pledge of 65% of the capital stock of certain of our domestic and foreign subsidiaries, the amended and restated Corporate Credit Facility is also secured by substantially all the assets of MEMC and its domestic subsidiaries.

Interest on borrowings under the Corporate Credit Facility will be based on either, at our election, LIBOR plus an initial applicable margin of 2.75% or at a defined prime rate plus an initial applicable margin of 1.75%. The amended facility also provides for the Company to pay various fees, including a commitment fee of 0.50% on the lenders’ unused commitments. The amended facility contains covenants which are typical for credit arrangements of this size, including covenants relating to a consolidated interest charge ratio, consolidated leverage ratio and a minimum liquidity ratio. There is also a cross default provision which may be triggered in certain situations.

As part of the amended and restated Corporate Credit Facility, we incurred debt issuance costs of $4.6 million, which is amortized into the statement of operations over the three year term of the facility. As of June 30, 2011, we had no outstanding borrowings under this facility. Outstanding third party letters of credit backed by this facility at such date were $109.8 million. We met all covenants under this facility at June 30, 2011.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related footnotes. In preparing these financial statements, we have made our best estimates of certain amounts included in the financial statements. Application of these accounting policies and estimates, however, involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. In arriving at our critical accounting estimates, factors we consider include how accurate the estimate or assumptions have been in the past, how much the estimate or assumptions have changed and how reasonably likely such change may have a material impact. Our critical accounting policies and estimates are more fully described in Item 7 and Note 2 of Notes to Consolidated Financial Statements, included in Exhibit 13 to our annual report on Form 10-K for the year ended December 31, 2010. The significant changes to our critical accounting policies and estimates since December 31, 2010 relate to revenue arrangements with multiple deliverables described below.

Revenue Arrangements with Multiple Deliverables

SunEdison solar energy system sales and post-system-sale operation and maintenance service contracts are usually negotiated and executed contemporaneously, which we evaluate together as a single arrangement with multiple deliverables in accordance with ASC 605-25, Multiple-Element-Arrangements, as updated by the FASB issued Accounting Standards Update 2009-13, Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”). Under ASC 605-25, we allocate revenue for transactions involving multiple elements to each unit of accounting based on its relative selling price, and recognize revenue for each unit of accounting when the revenue recognition criteria have been met. Our critical accounting policies and estimates, including our revenue recognition policies are more fully described in Item 7 and Note 2 of Notes to Consolidated Financial Statements, included in Exhibit 13 to our annual report on Form 10-K for the fiscal year ended December 31, 2010.

RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2011, the FASB issued Accounting Standards update 2011-04 (“ASU 2011-04”), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, to provide guidance about fair value measurement and disclosure requirements. This new standard does not extend to the use of the fair value but, rather, provides guidance as to how fair value should be applied where it is already required or permitted under IFRS or U.S. GAAP. For U.S. GAAP, most of the changes are clarifications of existing guidance or wording changes to align with IFRS 13. This standard will become effective for the Company for our annual reporting period beginning January 1, 2012 and will be applied prospectively. We do not expect adoption to have a material impact on our consolidated results of operation or financial condition.

47

In June 2011, the FASB issued Accounting Standards Update 2011-05 (“ASU 2011-05”), Presentation of Comprehensive Income, which will increase the prominence of other comprehensive income in financial statements. Under this ASU, an entity will have the option to present the components of net income and comprehensive income in either one or two consecutive financial statements. The ASU eliminates the option to present other comprehensive income in the statement of changes in equity. This standard becomes effective for the Company for our annual reporting period beginning January 1, 2012 and will be applied retrospectively.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Statements set forth in this Form 10-Q or statements incorporated by reference from documents we have filed with the Securities and Exchange Commission may contain forward-looking statements. Forward-looking statements are not based on historical facts but instead reflect our expectations, estimates or projections concerning future results or events, including, without limitation, statements regarding demand and/or pricing of our products or the pricing environment in the future; our statements regarding realization of the benefits of our tax assets; our statements regarding our exposure to indemnification of our solar energy system customers; the timing of reclassification of our currency forward contracts; the appropriateness of our tax positions and the timing of our IRS tax audits; the timing of our various manufacturing ramps; the accounting treatment of our acquisitions; the anticipated growth of our business in 2011; future amendments or termination of our agreements with our long-term solar wafer customers; the nature and extent of tax rebate programs or feed-in-tariffs in the future; the ultimate impact our legal proceedings may have on us; the charges we expect to incur and the savings we expect to realize by our announced restructurings; the anticipated effect of certain accounting pronouncements on our results of operations and financial condition; the classification of our solar energy systems as direct sales, sale-leasebacks or held systems; our expectation that gross profit in the near term should improve based on the curtailment of earthquake related charges; the requirements of and our compliance with the terms governing our indebtedness, including the indenture governing the 2019 Notes; and our statements regarding our working capital and other capital requirements for the next 12 months.

These statements generally can be identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “may,” “could,” “intend,” “belief,” “estimate,” “plan,” “likely,” “will,” “should” or other similar words or phrases. These statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results, performance or achievements to differ materially from those expressed in or indicated by those statements. We cannot assure you that any of our expectations, estimates or projections will be achieved. The forward-looking statements included in this document are only made as of the date of this document and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances.

Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. You should not place undue reliance on such statements, which speak only as of the date that they were made. Factors that could cause actual results to differ materially are set forth under “Item 1A. Risk Factors.”

These cautionary statements should be considered in connection with any written or oral forward-looking statements that we may issue in the future. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There has been no material change to MEMC’s market risks since December 31, 2010. Please refer to “Market Risk” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2010. Also see Note 4 to our unaudited condensed consolidated financial statements included herein.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation as of June 30, 2011, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2011.

Changes in Internal Control Over Financial Reporting

There have been no changes in MEMC’s internal control over financial reporting during the quarter ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, MEMC’s internal control over financial reporting.

48

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 16 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for disclosures concerning our legal proceedings, which disclosures are incorporated herein by reference.

Item 1A. Risk Factors.

In addition to the information set forth below and elsewhere in this Form 10-Q, you should carefully consider the factors discussed under “Cautionary Statements Regarding Forward Looking Statements” above and under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2010, our quarterly report on Form 10-Q for the quarter ended March 31, 2011, and those risk factors set forth below. These risks could materially and adversely affect our business, financial condition and results of operations. These enumerated risks are not the only risks we face. Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business.

Our Solar Materials business has experienced a decline in prices which could have a material adverse effect on our business, financial condition or results in operations.

According to independent sources, industry-wide wafer pricing fell approximately 40% during the second quarter of 2011. When selling prices decline, our net sales and gross profit also decline unless we are able to sell more products or reduce the cost to manufacture our products. These declining prices could negatively impact our revenues, gross profit and financial results, and if the selling prices for our products continue to decline, our operating results could be materially adversely affected.

If we are unable to enter into new financing agreements when needed, or upon desirable terms, for the construction and installation of our solar energy systems, or if any of our current financing partners discontinue or materially change the financing of our systems, we may be unable to finance our projects or our borrowing costs could increase, which would have a material adverse effect on our business, financial condition and results of operations.

We typically rely on credit facilities and working capital to fund the up-front costs associated with the design, construction and installation of our solar energy systems and the purchase of components, such as solar modules and inverters, for our systems. In addition, we secure long-term financing upon completion of our solar energy systems for those systems we retain and use the proceeds to refinance the debt incurred for the design, construction and installation of the solar energy systems, as well as to generate profits and cash-flow for our business. Without access to sufficient and appropriate financing, or if that financing is not available at desirable rates or on terms we deem appropriate, we would be unable to grow our SunEdison business by increasing the number of solar energy systems we are simultaneously developing. Additionally, we are exposed to interest rate risk, and an increase in interest rates could make it difficult to obtain the financing necessary for completion of our solar energy systems and could lower our return on investment on our solar energy systems. Our ability to obtain additional financing in the future depends on banks’ and other financing sources’ continued confidence in our business model and the renewable energy industry as a whole. Solar energy has yet to reach widespread market penetration and is highly dependent on continued support in the form of performance-based incentives, rebates, tax credits, feed-in tariffs and other incentives from federal, state and foreign governments. If this support were to dissipate, our ability to obtain external financing on acceptable terms, or at all, could be materially adversely affected. While we have substantial solar financing available to us, our current cash and financing sources may be inadequate to support the anticipated growth in our business plans. In addition, we do not have any dedicated financing in some of our emerging and international markets, and obtaining financing in these new markets could present unforeseen challenges. Our failure to obtain necessary financing to fund our operations would materially adversely affect our business, financial condition and results of operations.

To date we have obtained financing for our SunEdison business from a limited number of financial institutions. If any of these financial institutions decided not to continue financing our solar energy systems, or materially changed the terms under which they are willing to provide financing, we could be required to identify a new financial institution and negotiate new financing documentation. The process of identifying a new financing partner and agreeing on all relevant business and legal terms could be lengthy and could require us to reduce the rate of the growth of our business until such new financing arrangements were in place. In addition, we cannot assure you that the terms of the financing provided by a new financial institution would compare favorably with the terms available from our current financing partners. Our inability to secure financing could lead to cancelled projects, or reduced deal flow or we could be forced to finance the construction and installation of solar energy systems ourselves. In any such case, our borrowing costs could increase, which would have a material adverse effect on our business, financial condition and results of operations.

49

Our customers may fail to meet their obligation under long-term supply agreements we have with them, causing us to amend or terminate these agreements, which could negatively impact our financial condition and results of operation.

From time to time, one or more customers with which we have a long-term supply agreement may cease placing orders with us in order to attempt to renegotiate price or other terms under the agreement. For example, in January 2011, Suntech did not make a scheduled increased payment or renew a letter of credit required under our prior agreement with them. In June 2011, we terminated our supply agreement with Suntech which included a partial payment to resolve the contract.

After terminating the agreement with Suntech, we still have long-term supply agreements with several other customers. We have had to amend two of these agreements to reduce the wafer prices and expect to do the same with other customers. Although the long-term supply agreements with several of these customers are “take-or-pay contracts,” we cannot assure you that these customers will fulfill their purchase obligations under the agreements. Accordingly, we may need to further amend these or other long-term agreements with our customers in order to reduce prices, make changes to other provisions of the agreements, or terminate the agreements altogether, any of which could negatively impact our financial condition or results of operation.

Additionally, we may be required to stop shipping to customers who fail to meet their obligations under long-term supply agreements. The cessation of shipments to these customers could lead to excess or idle production capacity which, if we were unable to sell the products elsewhere or on similar terms, could adversely affect our results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Since 2007, our Board of Directors has had in place a share repurchase program. There were no repurchases during the second quarter of 2011.

Dividend Restrictions

In connection with our March 10, 2011 issuance of the 2019 Notes, we entered into an indenture which restricts us and our subsidiaries from making “restricted payments,” as defined in the indenture. Our corporate credit facility also contains similar restrictions on restricted payments. These restricted payments include the declaration or payment of any dividend or any distribution on account of our or our subsidiaries’ equity interests and may not be made unless criteria, as set forth in the indenture, has been met. The indenture and our corporate credit facility also restricts the usage of our working capital in certain situations.

50

Item 6. Exhibits.

Exhibit Number	Description
3-(i)	Restated Certificate of Incorporation of MEMC (incorporated by reference to Exhibit 3-a of MEMC’s Form 10-Q for the Quarter ended June 30, 1995)
3-(i)(a)	Certificate of Amendment of Restated Certificate of Incorporation of MEMC as filed with the Secretary of State of the State of Delaware on June 2, 2000 (incorporated by reference to Exhibit 3-(i)(a) of MEMC’s Form 10-Q for the Quarter ended June 30, 2000)
3-(i)(b)	Certificate of Amendment of Restated Certificate of Incorporation of MEMC as filed with the Secretary of State of the State of Delaware on July 10, 2002 (incorporated by reference to Exhibit 3-(i)(b) of MEMC’s Form 10-Q for the Quarter ended September 30, 2002)
3(ii)	Restated By-laws of MEMC (incorporated by reference to Exhibit 3.1 of MEMC’s Form 8-K filed on February 25, 2010)
4.1	Indenture (including the forms of notes), dated March 10, 2011, by and among MEMC, the subsidiary guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 10.1 of MEMC’s Form 8-K dated March 10, 2011)
4.2	Registration Rights Agreement, dated March 10, 2011, by and among MEMC Electronic Materials, Inc., the subsidiary guarantors named therein, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Goldman, Sachs & Co., as representatives of the several initial purchasers of the Notes (incorporated by reference to Exhibit 10.2 of MEMC’s Form 8-K dated March 10, 2011)
10.84	Purchase Agreement dated as of June 23, 2011 by and among Sun Edison LLC, FREI Sun Holdings (Cayman) Ltd., and FREI Sun Holdings (US) LLC
10.85	Termination Agreement dated as of June 30, 2011 by and between MEMC Singapore Pte. Ltd. and Suntech Power Holdings Co., LTD.
31.1	Certification by the Chief Executive Officer of MEMC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification by the Chief Financial Officer of MEMC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification by the Chief Executive Officer and the Chief Financial Officer of MEMC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

51

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MEMC Electronic Materials, Inc.
	/s/ Mark J. Murphy
August 9, 2011	Name:	Mark J. Murphy
	Title:	Senior Vice President and Chief Financial Officer (on behalf of the registrant and as principal financial officer)

52

EXHIBIT INDEX

The exhibits below are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K.

Number Exhibit	Description
10.84	Purchase Agreement dated as of June 23, 2011 by and among Sun Edison LLC, FREI Sun Holdings (Cayman) Ltd., and FREI Sun Holdings (US) LLC
10.85	Termination Agreement dated as of June 30, 2011 by and between MEMC Singapore Pte. Ltd. and Suntech Power Holdings Co., LTD.
31.1	Certification by the Chief Executive Officer of MEMC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification by the Chief Financial Officer of MEMC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification by the Chief Executive Officer and the Chief Financial Officer of MEMC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

53

EX-10.84

Exhibit 10.84

EXECUTION VERSION

PURCHASE AGREEMENT

This Purchase Agreement (this “Agreement”) is dated as of June 23, 2011, among FREI Sun Holdings (Cayman) Ltd., a Cayman Islands exempted company (“FR Holdings”), FREI Sun Holdings (US) LLC, a Delaware limited liability company (“FR Holdings US” and, collectively with FR Holdings, the “Purchasers”), Sun Edison LLC, a Delaware limited liability company (“SunEdison”) and, solely for the purpose of acknowledging Section 8 hereof, SunEdison Reserve International, L.P., a Cayman Islands limited partnership (“SunEdison Reserve International”) and SunEdison Reserve US, L.P., a Delaware limited partnership (“SunEdison Reserve US”).

WHEREAS, each of the parties hereto (collectively, the “Parties”) are party to that certain Framework Agreement (the “Framework Agreement”), dated as of May 21, 2010.

WHEREAS, in connection with the transactions contemplated by the Framework Agreement, SunEdison has been issued, and is the sole owner of, limited partnership interests in each of SunEdison Reserve International and SunEdison Reserve US, in each case corresponding to its 9.9% Percentage Interest.

WHEREAS, SunEdison desires to sell 100% of its limited partnership interests in SunEdison Reserve International to FR Holdings (the “Transferred International JV Interests”) and 100% of its limited partnership interests in SunEdison Reserve US (the “Transferred US JV Interests”) to FR Holdings US (collectively, the “Transferred JV Interests”) and each of FR Holdings and FR Holdings US desire to purchase such Transferred JV Interests.

NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. Definitions. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Framework Agreement.

2. Agreement to Purchase; Closing

(a) Purchase Price. Upon the terms and subject to the conditions of this Agreement, SunEdison will sell, assign, transfer and deliver, free and clear of all liens: (i) to FR Holdings, the Transferred International JV Interests (including all of SunEdison’s right, title and interest therein) in exchange for the payment by FR Holdings to SunEdison by wire transfer in immediately available funds in the amount of U.S.$12,023,275 (the “International Purchase Price”) and (ii) to FR Holdings US, the Transferred US JV Interests (including all of SunEdison’s right, title and interest therein) in exchange for the payment by FR Holdings US to SunEdison by wire transfer in immediately available funds in the amount of U.S.$10.00 (the “US Purchase Price” and, collectively with the International Purchase Price, the “Total Purchase Price”). Schedule 1 attached hereto sets forth the calculation of the Total Purchase Price.

EXECUTION VERSION

(b) Closing. Unless another date, location or time is mutually agreed by Purchasers and SunEdison, the closing of the transactions contemplated hereby (the “Closing”) shall take place at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, NY 10017, at 10:00 a.m. local time on the date hereof. The date of the Closing is herein referred to as the “Closing Date.”

(c) Withholding. Purchasers shall be entitled to deduct and withhold or cause to be deducted and withheld from amounts otherwise payable to SunEdison pursuant to this Agreement such amounts as they may be required to deduct and withhold with respect to such payments under any provision of federal, state, local or foreign tax law, with such amount agreed to in advance with SunEdison. Any amounts so deducted and withheld will be: (i) treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made; (ii) paid over to the applicable tax authority in the name, and for the account, of SunEdison; and (iii) documented in writing by Purchasers to SunEdison together with proof of payment of such withheld amounts.

3. No Assumption of Obligations or Liabilities. Purchasers are not directly or indirectly, assuming, and shall not in any way be or become responsible for (i) any obligations or liabilities arising from SunEdison’s breach of the representations, agreements, warranties or covenants made in this Agreement, the Framework Agreement or the JV Entity Agreements or (ii) any tax liabilities of SunEdison, including liability for taxes attributable to income or losses allocated to SunEdison in accordance with the provisions of the JV Entity Agreements.

4. Representations, Warranties of SunEdison. SunEdison hereby represents and warrants to Purchasers as follows:

(a) Ownership of Transferred JV Interests. SunEdison is a limited partner in each of SunEdison Reserve International and SunEdison Reserve US and holds all right, title and interest (legal and beneficial) in and to the Transferred JV Interests. SunEdison has, and by execution hereof will have transferred and delivered to FR Holdings and FR Holdings US, good and marketable title to the Transferred JV Interests, free and clear of any pledge, lien, security interest, mortgage, claim, charge, restriction, option, title defect or encumbrance, other than applicable restrictions under the applicable JV Entity Agreement.

(b) Authority. SunEdison is duly organized, validly existing and in good standing under the laws of the State of Delaware. The execution, delivery and performance by SunEdison of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of SunEdison. This Agreement has been duly and validly executed and delivered by SunEdison. Assuming the due authorization, execution and delivery by each of FR Holdings and FR Holdings US, this Agreement constitutes a valid and binding agreement of SunEdison, enforceable against SunEdison in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally and general principles of equity.

2

EXECUTION VERSION

(c) Non-contravention. The execution and delivery of this Agreement by SunEdison does not and will not, and the consummation by SunEdison of the transactions contemplated hereby will not (i) conflict with or result in a breach or violation of any provision of its limited liability company organizational documents; (ii) violate, conflict with, result in a breach of any provision of, constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, result in the termination or in a right of termination or cancellation of any of the terms, conditions or provisions of any of its material agreements; or (iii) contravene or conflict with, or constitute a violation of any provision of, or trigger any liability or obligation under, any law, order or government permit applicable to or binding on SunEdison, other than, in the case of clauses (ii) and (iii), any such violations, conflicts, breaches, defaults, terminations, cancellations, liabilities, obligations, liens, or contraventions that, individually or in the aggregate, have not had and are not reasonably likely to impair in any material respect the ability of SunEdison to consummate the transactions contemplated by, or to perform its obligations under, this Agreement.

(d) Consents. No consent, approval, order or authorization of, or registration, qualification or filing with, any governmental authority or any other Person is required on the part of SunEdison in connection with the execution, delivery and performance of this Agreement by SunEdison, other than such consents, approvals, authorizations, registrations, qualifications or filings the failure of which to obtain or make would not reasonably be expected to impair in any material respect the ability of SunEdison to consummate the transactions contemplated by, or to perform its obligations under, this Agreement.

(e) Tax Matters. SunEdison is not a foreign corporation, foreign partnership, foreign trust or foreign estate for U.S. federal income tax purposes and is a disregarded entity under Treasury Regulations Section 1.1445-2(b)(2)(iii) that is owned by MEMC Electronic Materials, Inc. and MEMC Electronic Materials, Inc. is not a foreign corporation, foreign partnership, foreign trust or foreign estate for U.S. federal income tax purposes.

(f) Brokers. No broker, finder or investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of SunEdison.

5. Representations and Warranties of Purchasers. Each Purchaser hereby represents and warrants to SunEdison as follows:

(a) Authority. Such Purchaser is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. The execution, delivery and performance by such Purchaser of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of such Purchaser. This Agreement has been duly and validly executed and delivered by such Purchaser. Assuming the due authorization, execution and delivery by SunEdison, this Agreement constitutes, a valid and binding agreement of such Purchaser, enforceable against such Purchaser in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally and general principles of equity.

3

EXECUTION VERSION

(b) Non-contravention. The execution and delivery of this Agreement by such Purchaser does not and will not, and the consummation by such Purchaser of the transactions contemplated hereby will not (i) conflict with or result in a breach or violation of any provision of its organizational documents; (ii) violate, conflict with, result in a breach of any provision of, constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, result in the termination or in a right of termination or cancellation of any of the terms, conditions or provisions of any of its material agreements; or (iii) contravene or conflict with, or constitute a violation of any provision of, or trigger any liability or obligation under, any law, order or government permit applicable to or binding on such Purchaser, other than, in the case of clauses (ii) and (iii), any such violations, conflicts, breaches, defaults, terminations, cancellations, liabilities, obligations, liens, or contraventions that, individually or in the aggregate, have not had and are not reasonably likely to impair in any material respect the ability of such Purchaser to consummate the transactions contemplated by, or to perform its obligations under, this Agreement.

(c) Consents. No consent, approval, order or authorization of, or registration, qualification or filing with, any governmental authority or any other Person is required on the part of such Purchaser in connection with the execution, delivery and performance of this Agreement by such Purchaser, other than such consents, approvals, authorizations, registrations, qualifications or filings the failure of which to obtain or make would not reasonably be expected to impair in any material respect the ability of such Purchaser to consummate the transactions contemplated by, or to perform its obligations under, this Agreement.

(d) Brokers. No broker, finder or investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Purchaser.

6. Closing Deliveries of SunEdison. At the Closing, SunEdison shall deliver or cause to be delivered to the Purchasers:

(a) Resignation Letter. A duly executed letter of resignation, effective as of the Closing, from Kevin Lapidus in his capacity as a member of the board of directors of SunEdison Reserve GP, LLC; and

(b) Funds Receipt. A duly executed receipt of funds in the form attached hereto as Exhibit A, evidencing SunEdison’s receipt of the Total Purchase Price in exchange for the Transferred JV Interests.

7. Closing Deliveries of Purchasers. At the Closing, the Purchasers shall deliver or cause to be delivered to SunEdison the Total Purchase Price as set forth in, and in accordance with, Section 2 hereof. Promptly following the Closing, the Purchasers shall cause SunEdison Reserve GP, LLC to update Schedule I to the limited partnership agreements of each of SunEdison Reserve International and SunEdison Reserve US to reflect the Transfers contemplated hereby and remove SunEdison from the list of limited partners in each such Schedule I.

4

EXECUTION VERSION

8. Effect on Framework Agreement Obligations. The Parties agree that their obligations (and the obligations of their Affiliates) derived from all Project documents in respect of Projects funded prior to the date hereof shall not be affected by this Agreement or any termination of the Framework Agreement.

9. Miscellaneous

(a) Expenses. All fees, costs and expenses incurred in connection with this Agreement, including the negotiation and preparation thereof, and the transactions contemplated hereby, shall be paid by the party incurring such fees and expenses.

(b) Further Action. Each of the parties hereto shall execute and deliver such documents and take such further actions as may be reasonably necessary or desirable to carry out the provisions hereof and the transactions contemplated hereby.

(c) Survival. All representations and warranties contained in this Agreement shall survive the Closing Date for six months following the Closing Date; provided, however, that the representations and warranties of SunEdison contained in Section 4(a) (Ownership of Transferred JV Interests) shall survive indefinitely.

(d) Entire Agreement. This Agreement (including the exhibits hereto) contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters, which the Parties acknowledge have been merged into this Agreement.

(e) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.

If to SunEdison:

Sun Edison LLC

12500 Baltimore Avenue

Beltsville, MD 20705

Attention: Kevin Lapidus,

General Counsel

Facsimile: (240) 264-8100

Email: klapidus@sunedison.com

5

EXECUTION VERSION

If to FR Holdings or FR Holdings US:   c/o First Reserve One Lafayette Place Greenwich, CT 06830 Attention: Alan G. Schwartz Facsimile: (203) 625-8579 Email: aschwartz@firstreserve.com with a copy to:   Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 Attention: William E. Curbow Facsimile: (212) 455-2502 Email: wcurbow@stblaw.com

(f) Severability. The invalidity in whole or in part of any part of this Agreement shall not affect the validity of the remainder of the Agreement.

(g) Successors and Assigns; Benefit. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned in whole or in part, whether by operation of law or otherwise, by any party without the express written consent of each of SunEdison, FR Holdings and FR Holdings US, and any such attempted assignment shall be void and unenforceable. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein express or implied shall give or be construed to give to any Person, other than the parties hereto and such permitted assigns, any legal or equitable rights hereunder.

(h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its choice of law provisions thereof.

(i) Submission to Jurisdiction. Each party to this Agreement hereby submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in The City of New York for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Each party to this Agreement hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such court and any claim that any such proceeding brought in such a court has been brought in an inconvenient form. Each party to this Agreement hereby irrevocably waives, to the fullest extent permitted by law, all right to a trial by jury in any action arising out of or relating to this Agreement. In any action which may be instituted against either party arising out of or relating to this Agreement, such party hereby consents to the service of process in connection with any action by the mailing thereof by registered or certified mail to such party’s address set forth in Section 9(e) or any other manner permitted by the State of New York.

(j) Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. All references in this Agreement to Sections and Exhibits shall refer to the Sections of, and Exhibits to, this Agreement unless the context shall otherwise require otherwise. The words “include,” “includes” and “including” shall not be limiting and shall be deemed to be followed by the phrase “without limitation.

6

EXECUTION VERSION

(k) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original. The parties may sign this Agreement by faxed copies or email transmissions of PDF or scanned copies, and any such faxed or emailed copy shall be deemed to be an original, and no objection shall be made to the introduction into evidence of any faxed or emailed copy on grounds related to the faxed or emailed copy not being an original.

[Remainder of page intentionally left blank]

7

EXECUTION VERSION

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

PURCHASERS
FREI SUN HOLDINGS (CAYMAN) LTD.
By:	/s/ Mark Florian

Name:	Mark Florian
Title:	Managing Director
FREI SUN HOLDINGS (US) LLC
By:	FREI Alpha AIV L.P., its managing member
By:	First Reserve Energy Infrastructure GP, L.P., its general partner
By:	First Reserve Energy Infrastructure GP Limited, its general partner

By: /s/ Mark Florian

Name:	Mark Florian
Title:	Managing Director
SUNEDISON
SUN EDISON LLC

By:	/s/ Kevin Lapidus
Name: Kevin Lapidus
Title: SVP & General Counsel

(Solely for the purposes of Section 8 hereof)
SUNEDISON RESERVE INTERNATIONAL, L.P.
By:	SunEdison Reserve GP, LLC, its general partner

By: /s/ Mark Florian

Name:	Mark Florian
Title:	Managing Director
SUNEDISON RESERVE INTERNATIONAL, L.P.
By:	SunEdison Reserve GP, LLC, its general partner

By: /s/ Mark Florian

Name:	Mark Florian
Title:	Managing Director

EX-10.85

Exhibit 10.85

EXECUTION VERSION

TERMINATION AGREEMENT FOR

SOLAR WAFER SUPPLY AGREEMENT

This Termination Agreement for Solar Wafer Supply Agreement (this “Termination Agreement”) is entered into as of June 30, 2011, by and between MEMC SINGAPORE PTE. LTD., a Singapore corporation (“MEMC Singapore”) and wholly-owned subsidiary of MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation with its principal place of business at 501 Pearl Drive (City of O’Fallon), St. Peters, Missouri 63376, United States of America (“MEMC”), and SUNTECH POWER HOLDINGS CO., LTD., a Cayman Islands company with its principal place of business at 9 Xin Hua Road, 6th Floor, New District, Wuxi, Jiangsu Province 214028, People’s Republic of China (“Suntech”). MEMC Singapore and Suntech together shall be referred to as the “Parties” and individually as a “Party”.

RECITALS:

WHEREAS, on July 25, 2006, MEMC and Suntech entered into that certain Solar Wafer Supply Agreement, pursuant to which MEMC agreed to supply and Suntech agreed to purchase certain quantities of solar wafers, pursuant to the terms of such agreement; and

WHEREAS, on October 6, 2006, pursuant to Section 7.6 of the Solar Wafer Supply Agreement, MEMC assigned such agreement to its wholly-owned subsidiary, MEMC Singapore; and

WHEREAS, on February 5, 2009, MEMC Singapore and Suntech entered into that certain Amendment Number 1 to Solar Wafer Supply Agreement (the “First Amendment”), pursuant to which MEMC Singapore and Suntech agreed to certain changes to the July 25, 2006 Solar Wafer Supply Agreement related to 2009 price and volume; and

WHEREAS, on July 23, 2009, MEMC Singapore and Suntech entered into that certain Amendment Number 2 to Solar Wafer Supply Agreement (the “Second Amendment”), pursuant to which MEMC Singapore and Suntech agreed to certain further changes to the July 25, 2006 Solar Wafer Supply Agreement related to 2009 price and volume; and

WHEREAS, the Parties hereto now wish to mutually terminate the July 25, 2006 Solar Wafer Supply Agreement, as amended by the First Amendment and the Second Amendment, as provided for herein by this Termination Agreement, as of the Effective Date (as defined below) of this Termination Agreement:

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, MEMC Singapore and Suntech agree as follows:

1

EXECUTION VERSION

ARTICLE I

TERMINATION OF AGREEMENT

1.1 Defined Terms. Capitalized terms used in this Termination Agreement and not otherwise defined herein shall have the meanings set forth in the Agreement, as such terms may have been amended by the First Amendment or the Second Amendment.

(a) “Agreement” shall mean the Solar Wafer Supply Agreement dating from July 25, 2006, as amended by the First Amendment on February 5, 2009, including all Attachments and Exhibits thereto, and as amended by the Second Amendment on July 23, 2009, including all Attachments and Exhibits thereto.

(b) “Effective Date” shall mean June 30, 2011.

(c) “Termination Agreement” shall mean this Termination Agreement, including all Attachments and Exhibits hereto.

1.2 Termination of Agreement. The Parties hereby agree as follows for the termination of the Agreement:

(a) Suntech shall pay MEMC Singapore the total sum of One Hundred Twenty Million Dollars ($120,000,000), to be comprised as follows:

(i) By execution of this Termination Agreement, Suntech immediately relinquishes, surrenders, abandons, renounces, forfeits and foregoes any and all rights it may have related to the potential return of the Fifty Three Million Dollars ($53,000,000) Loan/Security Deposit currently held by MEMC Singapore, and MEMC Singapore may immediately retain the entire Loan/Security Deposit amount, with no need for further action on either Party’s part; and

(ii) Concurrently with the execution of this Termination Agreement, Suntech shall provide to MEMC Singapore an irrevocable letter of credit, drawn on the New York, New York branch of the Bank of China (the “LC Bank”) in the total amount of Sixty Seven Million Dollars ($67,000,000), with the following drawing schedule (such irrevocable letter of credit is hereafter referred to as the “Termination Letter of Credit”):

(A) Sixteen Million Seven Hundred Fifty Thousand Dollars ($16,750,000) on July 1, 2011;

(B) Sixteen Million Seven Hundred Fifty Thousand Dollars ($16,750,000) on October 1, 2011;

(C) Sixteen Million Seven Hundred Fifty Thousand Dollars ($16,750,000) on January 1, 2012; and

2

EXECUTION VERSION

(D) Sixteen Million Seven Hundred Fifty Thousand Dollars ($16,750,000) on April 1, 2012.

The Termination Letter of Credit shall have only one drawing condition – the passage of time to each of the four separate drawing dates above. To draw on the Termination Letter of Credit, MEMC Singapore will only need to present the Termination Letter of Credit at the LC Bank, and MEMC Singapore shall not need any further documentation or authorization from Suntech to draw upon and receive the specified funds on each of the four separate drawing dates.

(b) In exchange for the execution of this Termination Agreement, the agreement for the payment of the total sum described in Section 1.2(a) above and the mutual releases in Sections 1.2(c) and 1.2(d) below, the Agreement shall be terminated as of the date hereof and Suntech shall be relieved of and excused from all further price and volume purchase obligations under the Agreement, and MEMC Singapore is excused from all further delivery and/or return of Loan/Security Deposit obligations.

(c) Except for obligations expressly created hereunder in accordance with the limited terms and conditions set forth above, MEMC Singapore hereby releases and discharges Suntech, and Suntech hereby releases and discharges MEMC Singapore, and each of their affiliated companies, and each of their present and past officers, directors, employees, agents, attorneys, representatives, hires, successors and guarantors (“Released Parties”), from any and all claims, debts, liabilities, demands, obligations, costs, expenses, actions and causes of action of every nature, whether known or unknown, up to and including the date of this Termination Agreement, which MEMC Singapore or Suntech may hold in connection with their respective rights and obligations under the Agreement.

(d) Except for obligations expressly created hereunder in accordance with the limited terms and conditions set forth above, Suntech hereby releases and discharges MEMC Singapore, and MEMC Singapore hereby releases and discharges Suntech, and each of their affiliated companies, and each of their present and past officers, directors, employees, agents, attorneys, representatives, hires, successors and guarantors (“Released Parties”), from any and all claims, debts, liabilities, demands, obligations, costs, expenses, actions and causes of action of every nature, whether known or unknown, up to and including the date of this Termination Agreement, which Suntech or MEMC Singapore may hold in connection with their respective rights and obligations under the Agreement.

ARTICLE II

MISCELLANEOUS

2.1 Amendment. This Termination Agreement may be amended, modified or supplemented only in writing signed by MEMC Singapore and Suntech.

2.2 Expenses. Each Party hereto shall bear its own fees and expenses with respect to the transactions contemplated hereby.

3

EXECUTION VERSION

2.3 Notices. Any notice, request, instruction or other document to be given or delivered hereunder by a Party hereto shall be in writing and shall be deemed to have been delivered, (a) when received if given in Person or by courier or a courier service, or (b) on the date of transmission if sent by facsimile transmission (receipt confirmed) on a Business Day during the normal business hours of the intended recipient, and if not so sent on such a day and at such a time, on the following Business Day:

If to MEMC, addressed as follows:

MEMC Singapore Pte. Ltd.

c/o MEMC Electronic Materials, Inc.

501 Pearl Drive (City of O’Fallon)

P.O. Box 8

St. Peters, MO 63376

Attention: EVP, Solar Materials

Tele: 636-474-5000

Fax: 636-474-5162

cc: MEMC General Counsel

If to Suntech, addressed as follows:

Suntech Power Holdings Co., Ltd.

17-6 Changjiang South Road

New District, Wuxi

Jiangsu Province 214028

People’s Republic of China

Attention: Chief Executive Officer

Tele: 86 -510-8534 2206

Fax: 86-510-8534 3409

cc: General Counsel

Fax: 415-882-9923

or to such other individual or address as a Party hereto may designate for itself by notice given as herein provided.

2.4 Waivers. The failure of a Party hereto at any time or times to require strict performance of any provision hereof or claim damages with respect thereto shall in no manner affect its right at a later time to enforce the same. No waiver by a Party of any condition or of any breach of any term, covenant, representation or warranty contained in this Termination Agreement shall be effective unless in writing, and no waiver in any one or more instances shall be deemed to be a further or continuing waiver of any such condition or breach in other instances or a waiver of any other condition or breach of any other term, covenant, representation or warranty.

4

EXECUTION VERSION

2.5 Assignment. This Termination Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns; provided, however, that, except with the written consent of the other Party, no assignment of this Termination Agreement or any rights or obligations hereunder, by operation of Law or otherwise, may be made by either Party.

2.6 Captions. Captions of Sections or Articles of this Termination Agreement are included for reference only, shall not be construed as part of this Termination Agreement and shall not be used to define, limit, extend or interpret the terms of this Termination Agreement.

2.7 Severability. If any provision of this Termination Agreement shall be held invalid, illegal or unenforceable, the validity, legality or enforceability of the other provisions hereof shall not be affected thereby, and there shall be deemed substituted for the provision at issue a valid, legal and enforceable provision as similar as possible to the provision at issue.

2.8 Entire Understanding. This Termination Agreement sets forth the entire agreement and understanding of the Parties hereto with respect to the transactions contemplated hereby and supersedes any and all prior agreements, arrangements and understandings, both written and oral, among the Parties relating to the subject matter hereof.

2.9 Language. Each of MEMC Singapore and Suntech agree that the language used in this Termination Agreement is the language chosen by the Parties to express their mutual intent, and that no rule of strict construction is to be applied against MEMC Singapore or Suntech. Each of MEMC Singapore and Suntech and their respective counsel have reviewed and negotiated the terms of this Termination Agreement.

2.10 Applicable Law. This Termination Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without giving effect to the principles of conflicts of law thereof.

2.11 Jurisdiction for Disputes. Each Party to this Termination Agreement hereby (a) agrees that any proceeding in connection with or relating to this Termination Agreement or any matters contemplated hereby may be brought by either Party in a court of competent jurisdiction located within New York City, New York, whether a state or federal court; (b) agrees that in connection with any such proceeding, such Party shall consent and submit to personal jurisdiction in any such court described in clause (a) of this Section 2.11 and to service of process upon it in accordance with the rules and statutes governing service of process; (c) agrees to waive to the full extent permitted by Law any objection that it may now or hereafter have to the venue of any such proceeding in any such court or that any such proceeding was brought in an inconvenient forum; (d) agrees to service of process in any such proceeding by mailing of copies thereof to such Party at its address set forth in Section 2.3; (e) agrees that any service made as provided herein shall be effective and binding service in every respect; and (f) agrees that nothing herein shall affect the rights of either Party to effect service of process in any other manner permitted by Law.

5

EXECUTION VERSION

2.12 Counterparts; Facsimile Signatures. This Termination Agreement may be executed in counterparts, and when so executed each counterpart shall be deemed to be an original, and said counterparts together shall constitute one and the same instrument. This Termination Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature shall be deemed to have the same effect as if the original signature had been delivered to the other Part(ies). The original signature copy shall be delivered to the other Part(ies) by express overnight delivery. The failure to deliver the original signature copy and/or the nonreceipt of the original signature copy shall have no effect upon the binding and enforceable nature of this Termination Agreement.

[remainder of page intentionally left blank; signature page follows]

6

EXECUTION VERSION

IN WITNESS WHEREOF, the Parties hereto have caused this Termination Agreement to be executed and delivered as of the date first above written.

MEMC SINGAPORE PTE. LTD.		SUNTECH POWER HOLDINGS CO., LTD.
By:	/s/ Kenneth H. Hannah	By:	/s/ Dr. Zhengrong Shi
	Kenneth H. Hannah	Dr. Zhengrong Shi
	President and Chairman	Chief Executive Officer

SIGNATURE PAGE TO

TERMINATION AGREEMENT FOR SOLAR WAFER SUPPLY AGREEMENT

EX-31.1

Exhibit 31.1

Certification

I, Ahmad Chatila, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MEMC Electronic Materials, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision; to ensure that material information relating to the registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2011

/s/ Ahmad Chatila

Ahmad Chatila

President and Chief Executive Officer

54

EX-31.2

Exhibit 31.2

Certification

I, Mark J. Murphy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MEMC Electronic Materials, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision; to ensure that material information relating to the registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2011

/s/ Mark J. Murphy

Mark J. Murphy

Senior Vice President and Chief Financial Officer

53

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of MEMC Electronic Materials, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Ahmad Chatila, President, Chief Executive Officer and Director of the Company, and Mark J. Murphy, Senior Vice President and Chief Financial Officer of the Company, certify, to the best of our knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2011

By:	/s/ Ahmad Chatila
Name:	Ahmad Chatila
Title:	President and Chief Executive Officer MEMC Electronic Materials, Inc.

Date: August 9, 2011

By:	/s/ Mark J. Murphy
Name:	Mark J. Murphy
Title:	Senior Vice President and Chief Financial Officer MEMC Electronic Materials, Inc.

XML



Earnings Per Share (Narrative) (Details) (USD $) In Millions	0 Months Ended	3 Months Ended		6 Months Ended
	Feb. 01, 2011	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Earnings Per Share
Contingent consideration common stock issued	2.1			2.1
Initial stock consideration due to former unit holders held in escrow	$ 4.9
Antidilutive stock excluded from the calculation of diluted EPS		20.0	13.1	20.4	11.8

XML



Condensed Consolidated Statements of Operations (Parenthetical) (USD $) In Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
Condensed Consolidated Statements of Operations
Contract resolution revenue recognized	$ 149.4	$ 149.4
Cost of Goods Sold Purchase Obligations	$ 52.4	$ 52.4

XML



Condensed Consolidated Balance Sheets (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 651.9	$ 707.3
Restricted cash	38.1	43.8
Accounts receivable, less allowance for doubtful accounts of $7.8 in 2011 and 2010	272.9	296.0
Inventories	335.4	214.6
Solar energy systems held for development and sale, including consolidated variable interest entities of $39.5 and $151.8 in 2011 and 2010, respectively	226.5	237.5
Income taxes receivable	25.6	35.6
Prepaid and other current assets	269.2	202.5
Total current assets	1,819.6	1,737.3
Investments	145.2	110.3
Property, plant and equipment, net:
Semiconductor and Solar Materials, net of accumulated depreciation of $764.5 and $694.6 in 2011 and 2010, respectively	1,677.5	1,465.9
Solar energy systems, including consolidated variable interest entities of $58.6 and $56.2 in 2011 and 2010, respectively, net of accumulated depreciation of $23.2 and $14.3 in 2011 and 2010, respectively	740.0	567.6
Deferred tax assets, net	211.3	139.3
Restricted cash	20.0	18.7
Other assets	228.8	177.6
Goodwill	404.9	342.7
Intangible assets, net	50.1	52.5
Total assets	5,297.4	4,611.9
Current liabilities:
Current portion of long-term debt and capital lease obligations	10.7	6.4
Short-term solar energy system financing, current portion of solar energy system financing and capital lease obligations, including consolidated variable interest entities of $5.9 and $28.8 in 2011 and 2010, respectively	59.0	65.7
Accounts payable	608.4	745.5
Accrued liabilities	180.6	165.4
Contingent consideration related to acquisitions	51.0	106.4
Accrued wages and salaries	57.5	50.4
Deferred revenue for solar energy systems	27.8	8.8
Customer deposits	60.2	92.9
Income taxes payable	80.2	42.6
Total current liabilities	1,135.4	1,284.1
Long-term debt and capital lease obligations, less current portion	641.5	20.5
Long-term solar energy system financing and capital lease obligations, less current portion, including consolidated variable interest entities of $86.8 and $107.2 in 2011 and 2010, respectively	693.2	590.1
Pension and post-employment liabilities	56.1	54.1
Deferred revenue for solar energy systems	112.7	75.0
Semiconductor and Solar Materials deferred revenue	52.7	115.2
Other liabilities	179.4	177.3
Total liabilities	2,871.0	2,316.3
Stockholders' equity:
Preferred stock, $.01 par value, 50.0 shares authorized, none issued and outstanding at 2011 and 2010
Common stock, $.01 par value, 300.0 shares authorized, 240.6 and 237.9 shares issued at 2011 and 2010, respectively	2.4	2.4
Additional paid-in capital	603.2	557.9
Retained earnings	2,156.3	2,113.5
Accumulated other comprehensive income	74.8	34.1
Treasury stock, 10.3 and 10.0 shares in 2011 and 2010, respectively	(458.9)	(456.2)
Total MEMC stockholders' equity	2,377.8	2,251.7
Noncontrolling interests	48.6	43.9
Total stockholders' equity	2,426.4	2,295.6
Total liabilities and stockholders' equity	$ 5,297.4	$ 4,611.9

XML



Deferred Revenue and Profit (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
Deferred Revenue and Profit
Contract terms, years		10
Maximum percentage to purchase equity stake		4.99%
Contract resolution, payment agreement		$ 120.0
Contract resolution, cash deposit		53.0
Contract resolution, letter of credit		67.0
Deferred revenue prior to the resolution of long-term solar wafer supply		56.4
Total of contract resolution components		176.4
Contract resolution revenue recognized	149.4	149.4
Deferred revenue, current related to the contract resolution	$ 27.0	$ 27.0

XML



Inventories (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Raw materials and supplies	$ 144.8	$ 104.8
Goods and work in process	103.2	58.0
Finished goods	87.4	51.8
Inventories,Total	335.4	214.6
MEMC, Inc. [Member]
Inventories,Total	$ 44.5	$ 33.3

XML



Reportable Segments

6 Months Ended

Jun. 30, 2011

Reportable Segments

Reportable Segments

(17) Reportable Segments

	Three Months Ended June  30,						Six Months Ended June 30,
In millions	2011			2010			2011			2010
Net sales:
Semiconductor Materials	$	275.3		$	249.6		$	526.8		$	468.9
Solar Materials		323.1			168.0			649.4			325.7
Solar Energy		147.2			30.7			305.3			91.4
Consolidated net sales	$	745.6		$	448.3		$	1,481.5		$	886.0
Operating income (loss):
Semiconductor Materials	$	3.4		$	24.3		$	11.8		$	16.4
Solar Materials		89.2			19.1			128.6			31.3
Solar Energy		(8.4	)		(4.4	)		(15.0	)		2.4
Corporate and other		(32.5	)		(35.7	)		(73.9	)		(62.1	)
Consolidated operating income (loss)	$	51.7		$	3.3		$	51.5		$	(12.0	)
Interest expense (income):
Semiconductor Materials	$	(0.5	)	$	0.2		$	(0.7	)	$	0.3
Solar Materials		1.8			—			1.1			0.1
Solar Energy		7.1			4.9			12.2			16.0
Corporate and other		12.8			0.9			17.6			1.7
Consolidated net interest expense	$	21.2		$	6.0		$	30.2		$	18.1
Depreciation and amortization:
Semiconductor Materials	$	31.0		$	26.2		$	61.6		$	52.5
Solar Materials		17.3			7.3			29.7			14.2
Solar Energy		7.3			5.1			13.3			9.4
Consolidated depreciation and amortization	$	55.6		$	38.6		$	104.6		$	76.1
Capital expenditures:
Semiconductor Materials	$	34.0		$	31.6		$	84.7		$	50.5
Solar Materials		65.2			62.9			219.5			90.2
Solar Energy(1)		175.3			67.1			228.3			112.0
Corporate and other		2.3			0.1			2.3			0.1
Consolidated capital expenditures	$	276.8		$	161.7		$	534.8		$	252.8

⁽¹⁾ Consists primarily of construction of solar energy systems of $174.1 million and $226.7 million in the three and six-months ended June 30, 2011, respectively, and $66.8 million and $111.7 million in the three and six-months ended June 30, 2010, respectively.

During the three months ended June 30, 2011, there was $149.4 million of revenue recognized in the Solar Materials segment as part of the Suntech wafer supply contract resolution (see Note 15). Additionally, the Solar Materials segment charged $52.4 million to cost of goods sold related to the estimated probable shortfall to our purchase obligations associated with take-or-pay agreements we have with suppliers for raw materials. No similar amounts were recorded in prior periods.

Restructuring and impairment costs for the three and six months ended June 30, 2011 were $13.6 million and $13.8 million, respectively. Of these restructuring and impairment costs, $8.1 million was recorded to the Semiconductor Materials segment, $4.2 million was recorded to the Solar Energy segment, and $1.3 million was recorded to the Solar Materials segment in the three months ended June 30, 2011. The additional $0.2 million for the six months ended June 30, 2011 was recorded to the Semiconductor Materials segment. All 2010 restructuring expenses were recorded to the Semiconductor Materials segment.

Equity in earnings of joint venture, net of tax of $3.3 million in the six months ended June 30, 2011 relates to the joint venture with Zhenjiang Huantai JV and is part of our Solar Materials segment. Equity in earnings of joint venture, net of tax of $7.3 million in the six months ended June 30, 2010 relates to the joint venture with Q-Cells and is part of our Solar Materials segment.

Due to the earthquake in Japan on March 11, 2011, our semiconductor wafer production in Japan was suspended from that time through April 12, 2011. Because of the unplanned downtime and damages to the plant, we recorded $23.5 million as period charges to the Semiconductor Materials segment operating margin, with $15.8 million recorded to cost of goods sold due to the under absorption of costs, inventory adjustments, and asset impairment charges. We had no similar adjustments during the first six months of 2010.

Approximately $13.1 million of expenses were recorded in the Corporate segment, related to legal cases during the quarter ended March 31, 2011. Because the business decision resulting in this litigation affected multiple segments, these expenses were recorded to Corporate and other. The remaining portion of expenses recorded to Corporate included stock compensation expense, general corporate marketing and administration costs, research and development administration costs, legal and tax professional services and related costs, and other personnel costs not reflected in the operating segments.

The Solar Energy and Solar Materials segments include $348.5 million and $56.4 million of goodwill, respectively. We have recorded no impairment on the goodwill.

During the second quarter of 2010, we received $11.9 million in net insurance proceeds from our business interruption lost profits claim related to the disruption in production at our Pasadena, Texas facility as a result of Hurricane Ike in 2008. Of this amount, $8.0 million was recorded to our Semiconductor Materials segment and $3.9 million was recorded to our Solar Materials segment. No similar transactions occurred during the first six months of 2011.

XML



Subsequent Events (Details) (USD $) In Millions	Aug. 03, 2011	Jun. 30, 2011	Dec. 31, 2010
Subsequent Events
Approximate price paid	$ 112.0
Assumptions and repayments of intercompany loans	1.9	(51.0)	(106.4)
Assumption of intercompany capital contributions	21.0
Earn-out provision, maximum	$ 103.6

XML



Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Aug. 05, 2011
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
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		230,433,037

XML



Derivatives and Hedging Instruments (Derivative Instruments, Gain (Loss) in Statement of Operations) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Derivatives Not Designated as Hedging Instrument [Member] | Currency Forward Contracts [Member] | Other, Net [Member]
Derivative Instruments (Gains) Losses Recognized in Statement of Operations Location	$ (12.0)	$ (2.7)	$ (10.2)	$ (3.8)
Derivatives Not Designated as Hedging Instrument [Member] | Suntech Warrant [Member] | (Increase) Decline in Fair Value of Warrant [Member]
Derivative Instruments (Gains) Losses Recognized in Statement of Operations Location	1.9	6.8	0.3	12.1
Derivatives Designated as Hedging Instrument [Member] | Net Investment Hedging [Member] | Other, Net [Member]
Derivative Instruments (Gains) Losses Recognized in Statement of Operations Location		$ (16.9)		$ (16.9)

XML



Restructuring and Impairment Charges (Tables)

6 Months Ended

Jun. 30, 2011

Restructuring and Impairment Charges

Details of Restructuring Expenses

										As of June 30, 2011
In millions	Accrued, December  31, 2010		Year-to-Date Restructuring Charges		Cash Payments			Accrued, June 30, 2011		Cumulative Costs Incurred		Total Costs Expected to be Incurred
2009 U.S. Plan
Severance and other employee benefits	$	16.2	$	0.1	$	(1.1	)	$	15.2	$	18.3	$	19.2
Asset move costs		—		0.8		(0.8	)		—		4.0		20.3
Contract termination		—		2.9		—			2.9		2.9		2.9
Infrastructure costs		—		—		—			—		—		4.0
Total	$	16.2	$	3.8	$	(1.9	)	$	18.1	$	25.2	$	46.4

XML



Derivatives and Hedging Instruments (Derivatives and Hedging Activities) (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Accrued Liabilities [Member] | Derivatives Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member]
Assets (Liabilities or Equity) Fair Value	$ (3.4)	$ (6.2)
Accrued Liabilities [Member] | Derivatives Designated as Hedging Instrument [Member] | Currency Forward Contracts [Member]
Assets (Liabilities or Equity) Fair Value		(8.6)
Accrued Liabilities [Member] | Derivatives Not Designated as Hedging Instrument [Member] | Currency Forward Contracts [Member]
Assets (Liabilities or Equity) Fair Value	(1.5)	(0.5)
Prepaid and Other Current Assets [Member] | Derivatives Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member]
Assets (Liabilities or Equity) Fair Value	0.6	0.7
Prepaid and Other Current Assets [Member] | Derivatives Not Designated as Hedging Instrument [Member] | Currency Forward Contracts [Member]
Assets (Liabilities or Equity) Fair Value	14.3	2.1
Prepaid and Other Current Assets [Member] | Derivatives Not Designated as Hedging Instrument [Member] | Other Derivatives [Member]
Assets (Liabilities or Equity) Fair Value		1.2
Accumulated Other Comprehensive Income [Member] | Derivatives Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member]
Assets (Liabilities or Equity) Fair Value	0.8	2.4
Accumulated Other Comprehensive Income [Member] | Derivatives Designated as Hedging Instrument [Member] | Currency Forward Contracts [Member]
Assets (Liabilities or Equity) Fair Value		8.6
Other Assets [Member] | Derivatives Not Designated as Hedging Instrument [Member] | Other Derivatives [Member]
Assets (Liabilities or Equity) Fair Value	1.8	1.6
Other Assets [Member] | Derivatives Not Designated as Hedging Instrument [Member] | Suntech Warrant [Member]
Assets (Liabilities or Equity) Fair Value	$ 4.9	$ 5.2

XML



Condensed Consolidating Financial Information (Schedule of Condensed Consolidating Statement of Operations) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net sales	$ 745.6	$ 448.3	$ 1,481.5	$ 886.0
Cost of goods sold	564.5	371.4	1,186.4	749.8
Gross profit	181.1	76.9	295.1	136.2
Marketing and administration	94.0	72.6	187.0	134.8
Research and development	21.8	11.5	42.8	22.6
Restructuring and impairment charges	13.6	1.4	13.8	2.7
Insurance recovery		(11.9)		(11.9)
Operating income (loss)	51.7	3.3	51.5	(12.0)
Interest expense	21.2	6.0	30.2	18.1
Interest income	(0.9)	(1.8)	(1.8)	(4.1)
(Increase) decline in fair value of warrant	1.9	6.8	0.3	12.1
Other, net	(17.2)	(7.0)	(17.6)	(6.4)
Total non-operating expense	5.0	4.0	11.1	19.7
Loss before income tax benefit and equity in earnings of joint ventures	46.7	(0.7)	40.4	(31.7)
Income tax benefit	0.9	(16.1)	(13.4)	(30.7)
Income (loss) before equity in earnings of joint ventures	45.8	15.4	53.8	(1.0)
Equity in earnings of joint venture, net of tax	2.0		3.3	7.3
Net income	47.8	15.4	57.1	6.3
Net income attributable to noncontrolling interests	(0.5)	(1.6)	(14.3)	(2.1)
Net (loss) income attributable to MEMC stockholders	47.3	13.8	42.8	4.2
MEMC, Inc. [Member]
Net sales	232.1	209.7	440.4	408.3
Cost of goods sold	236.2	207.5	452.3	405.5
Gross profit	(4.1)	2.2	(11.9)	2.8
Marketing and administration	37.1	34.6	81.8	63.4
Research and development	15.6	8.1	30.8	16.3
Restructuring and impairment charges	6.5	1.4	6.7	2.7
Operating income (loss)	(63.3)	(41.9)	(131.2)	(79.6)
Interest expense	11.1	(0.5)	14.3	(1.1)
Interest income	(0.1)		(0.2)	(0.1)
Other, net	(12.3)	(24.3)	(22.7)	(28.8)
Total non-operating expense	(1.3)	(24.8)	(8.6)	(30.0)
Loss before income tax benefit and equity in earnings of joint ventures	(62.0)	(17.1)	(122.6)	(49.6)
Income tax benefit	(30.5)	(13.7)	(44.7)	(31.2)
Income (loss) before equity in earnings of joint ventures	(31.5)	(3.4)	(77.9)	(18.4)
Investment in subsidiary earnings	78.9	17.2	120.8	24.1
Equity in earnings of joint venture, net of tax	(0.1)		(0.1)	(1.5)
Net income	47.3	13.8	42.8	4.2
Net (loss) income attributable to MEMC stockholders	47.3	13.8	42.8	4.2
Guarantor Subsidiaries [Member]
Net sales	111.4	87.7	252.2	168.2
Cost of goods sold	99.2	73.0	244.6	150.7
Gross profit	12.2	14.7	7.6	17.5
Marketing and administration	20.5	13.8	43.0	28.4
Research and development	2.1	1.1	4.2	1.9
Restructuring and impairment charges	0.4		0.4
Insurance recovery		(11.9)		(11.9)
Operating income (loss)	(10.8)	11.7	(40.0)	(0.9)
Interest expense	0.2	1.1	0.6	2.3
Interest income	(0.2)	(0.9)	(0.4)	(2.4)
Other, net	(2.1)	0.4	(1.3)	0.3
Total non-operating expense	(2.1)	0.6	(1.1)	0.2
Loss before income tax benefit and equity in earnings of joint ventures	(8.7)	11.1	(38.9)	(1.1)
Income tax benefit	13.2	(4.6)	0.9	(4.1)
Income (loss) before equity in earnings of joint ventures	(21.9)	15.7	(39.8)	3.0
Investment in subsidiary earnings	95.2	(5.4)	112.4	(8.5)
Net income	73.3	10.3	72.6	(5.5)
Net income attributable to noncontrolling interests	0.1	(0.3)	0.1	(0.3)
Net (loss) income attributable to MEMC stockholders	73.4	10.0	72.7	(5.8)
Non-Guarantor Subsidiaries [Member]
Net sales	1,057.5	508.3	1,947.6	1,010.5
Cost of goods sold	876.9	438.0	1,627.0	882.1
Gross profit	180.6	70.3	320.6	128.4
Marketing and administration	36.4	24.2	62.2	43.0
Research and development	4.1	2.3	7.8	4.4
Restructuring and impairment charges	6.7		6.7
Operating income (loss)	133.4	43.8	243.9	81.0
Interest expense	9.5	6.2	16.0	19.4
Interest income	(0.2)	(1.7)	(1.9)	(4.1)
(Increase) decline in fair value of warrant	1.9	6.8	0.3	12.1
Other, net	(7.3)	8.3	(0.2)	13.1
Total non-operating expense	3.9	19.6	14.2	40.5
Loss before income tax benefit and equity in earnings of joint ventures	129.5	24.2	229.7	40.5
Income tax benefit	19.5	4.6	31.3	8.0
Income (loss) before equity in earnings of joint ventures	110.0	19.6	198.4	32.5
Equity in earnings of joint venture, net of tax	2.1		3.4	8.8
Net income	112.1	19.6	201.8	41.3
Net income attributable to noncontrolling interests	(0.6)	(1.3)	(14.4)	(1.8)
Net (loss) income attributable to MEMC stockholders	111.5	18.3	187.4	39.5
Consolidating Adjustments [Member]
Net sales	(655.4)	(357.4)	(1,158.7)	(701.0)
Cost of goods sold	(647.8)	(347.1)	(1,137.5)	(688.5)
Gross profit	(7.6)	(10.3)	(21.2)	(12.5)
Operating income (loss)	(7.6)	(10.3)	(21.2)	(12.5)
Interest expense	0.4	(0.8)	(0.7)	(2.5)
Interest income	(0.4)	0.8	0.7	2.5
Other, net	4.5	8.6	6.6	9.0
Total non-operating expense	4.5	8.6	6.6	9.0
Loss before income tax benefit and equity in earnings of joint ventures	(12.1)	(18.9)	(27.8)	(21.5)
Income tax benefit	(1.3)	(2.4)	(0.9)	(3.4)
Income (loss) before equity in earnings of joint ventures	(10.8)	(16.5)	(26.9)	(18.1)
Investment in subsidiary earnings	(174.1)	(11.8)	(233.2)	(15.6)
Net income	(184.9)	(28.3)	(260.1)	(33.7)
Net (loss) income attributable to MEMC stockholders	$ (184.9)	$ (28.3)	$ (260.1)	$ (33.7)

XML



Earnings Per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share

Earnings Per Share

(6) Earnings Per Share

For the three month periods ended June 30, 2011 and June 30, 2010, basic and diluted earnings per share ("EPS") were calculated as follows:

	Three Months Ended				Three Months Ended
	June 30, 2011				June 30, 2010
In millions, except per share amounts	Basic		Diluted		Basic		Diluted
EPS Numerator:
Net income allocable to common stockholders	$	47.3	$	47.3	$	13.8	$	13.8
EPS Denominator:
Weighted-average shares outstanding		229.8		229.8		226.8		226.8
Stock options and restricted stock units		—		1.1		—		1.2
Total shares		229.8		230.9		226.8		228.0
Earnings per share	$	0.21	$	0.21	$	0.06	$	0.06

For the six month periods ended June 30, 2011 and June 30, 2010, basic and diluted earnings per share were calculated as follows:

	Six Months Ended				Six Months Ended
	June 30, 2011				June 30, 2010
In millions, except per share amounts	Basic		Diluted		Basic		Diluted
EPS Numerator:
Net income allocable to common stockholders	$	42.8	$	42.8	$	4.2	$	4.2
EPS Denominator:
Weighted-average shares outstanding		229.4		229.4		226.8		226.8
Stock options and restricted stock units		—		1.6		—		1.1
Total shares		229.4		231.0		226.8		227.9
Earnings per share	$	0.19	$	0.19	$	0.02	$	0.02

On February 1, 2011, we issued 2.1 million shares to SunEdison's former unit holders as part of the contingent consideration pursuant to the terms of the acquisition agreement. Approximately $4.9 million of the initial stock consideration due to SunEdison's former unit holders was held in escrow pursuant to the terms of the acquisition agreement as of June 30, 2011. A portion of the shares held in escrow at June 30, 2011 were released during the third quarter of 2011.

For the three months ended June 30, 2011 and June 30, 2010, 20.0 million and 13.1 million shares, respectively, of options and restricted stock units were excluded from the calculation of diluted EPS because the effect was antidilutive. For the six months ended June 30, 2011 and June 30, 2010, 20.4 million and 11.8 million shares, respectively, of options and restricted stock units were excluded from the calculation of diluted EPS because the effect was antidilutive.

XML



Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Financial Instruments Measured at Fair Value on Recurring Basis

	As of June 30, 2011											As of December 31, 2010
Assets (liabilities) in millions	Level 1		Level 2			Level 3			Total			Level 1			Level 2			Level 3			Total
Available for sale investments	$	—	$	35.4		$	—		$	35.4		$	—		$	41.1		$	—		$	41.1
Suntech warrant		—		—			4.9			4.9			—			—			5.2			5.2
Interest rate swaps and option thereon		—		(2.8	)		—			(2.8	)		—			(4.3	)		—			(4.3	)
Currency forward contracts		12.8		—			—			12.8			(7.0	)		—			—			(7.0	)
Other derivatives		—		—			1.8			1.8			—			—			1.6			1.6
Contingent consideration related to acquisitions		—		—			(51.0	)		(51.0	)		(80.2	)					(26.2	)		(106.4	)
Total	$	12.8	$	32.6		$	(44.3	)	$	1.1		$	(87.2	)	$	36.8		$	(19.4	)	$	(69.8	)

Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis

In millions	Available for Sale Investments			Trading Investments			Auction Rate Securities Right			Suntech Warrant			Contingent consideration related to acquisitions			Other Derivatives		Total
Balance at December 31, 2009	$	11.6		$	38.4		$	2.0		$	19.2		$	(77.4	)	$	—	$	(6.2	)
Total unrealized gains (losses) included inearnings(1)		—			0.3			(1.8	)		(12.1	)		(4.7	)		—		(18.3	)
Total unrealized gains included in other comprehensive income, net		0.2			—			—			—			—			—		0.2
Sales, redemptions and maturities		(9.2	)		(32.9	)		—			—			—			—		(42.1	)
Transfers out of Level 3, net		(2.6	)		—			—			—			—			—		(2.6	)
Balance at June 30, 2010	$	—		$	5.8		$	0.2		$	7.1		$	(82.1	)	$	—	$	(69.0	)
Balance at December 31, 2010	$	—		$	—		$	—		$	5.2		$	(26.2	)	$	1.6	$	(19.4	)
Total unrealized (losses) gains included in earnings(1)		—			—			—			(0.3	)		6.2			0.2		6.1
Acquisitions		—			—			—			—			(31.0	)		—		(31.0	)
Balance at June 30, 2011	$	—		$	—		$	—		$	4.9		$	(51.0	)	$	1.8	$	(44.3	)
The amount of total (losses) gains for the six months ended June 30, 2011 included in earnings attributable to the change in unrealized (losses) gains relating to assets and liabilities still held at the reporting date	$	—		$	—		$	—		$	(0.3	)	$	6.2		$	0.2	$	6.1

⁽¹⁾  Amounts included in earnings are recorded to non-operating expense (income) in the consolidated statements of operations, except for the amount included in marketing and administration for the contingent consideration related to acquisitions, for which changes to the fair value were recorded to operating income (loss) in the consolidated statement of operations.

XML



Fair Value Measurements (Narrative) (Details) (USD $) In Millions	0 Months Ended	6 Months Ended	12 Months Ended
	Feb. 01, 2011	Jun. 30, 2011	Dec. 31, 2010	Mar. 31, 2011
Carrying amount of long-term and short-term debt and capital lease obligations		$ 1,404.4	$ 682.7
Estimated fair value of outstanding debt and capital lease obligations		1,153.6	510.4
Business acquisition, contingent consideration		26.0	80.2	5.0
Contingent consideration paid in cash	55.7	51.0
Contingent consideration common stock issued	2.1
Derivative liabilities		2.1
SunEdison [Member]
Business acquisition, contingent consideration		$ 80.2

XML



Deferred Revenue and Profit (Tables)

6 Months Ended

Jun. 30, 2011

Deferred Revenue and Profit

Schedule of Deferred Revenue and Profit

In millions	As of June 30, 2011		As of December 31, 2010
Deferred revenue and profit for solar energy systems:
Short-term deposits on solar energy systems	$	27.8	$	8.8
Profit deferrals on solar energy system sales		99.4		63.2
Deferred subsidy revenue		13.3		11.8
Total solar energy system deferred revenue	$	140.5	$	83.8
Semiconductor and Solar Materials deferred revenue:
Short-term deferred revenue		27.0		—
Long-term deferred revenue		52.7		115.2
Total Semiconductor and Solar Materials deferred revenue	$	79.7	$	115.2
Total deferred revenue	$	220.2	$	199.0

XML



Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events

Subsequent Events

(19) Subsequent Events

On August 3, 2011, MEMC reached a definitive agreement to acquire privately held Fotowatio Renewable Ventures, Inc. ("FRV U.S."), a developer of solar power projects. MEMC will pay at closing approximately $112 million, plus the assumption and repayment of approximately $1.9 million in intercompany loans and approximately $21 million in intercompany capital contributions. The final purchase price is subject to adjustment based on the actual amount of intercompany loans and capital contributions at closing. The agreement also includes an earn-out provision of up to $103.6 million should FRV U.S. achieve certain performance targets which may affect the GAAP purchase price. The acquisition is expected to close in the third or fourth quarter of 2011, subject to customary closing conditions, including the receipt of regulatory approvals.

XML



Debt and Capital Lease Obligations

6 Months Ended

Jun. 30, 2011

Debt and Capital Lease Obligations

Debt and Capital Lease Obligations

(11) Debt and Capital Lease Obligations

Debt (including consolidated variable interest entities ("VIEs")) and capital leases outstanding consist of the following:

	As of June 30,		As of December 31,
In millions	2011		2010
Short-term debt:
Solar energy systems, weighted average interest rate of 6.15% and 6.13%, respectively	$	29.0	$	33.6
Long-term debt and capital leases:
Senior notes	$	550.0	$	—
Solar energy systems:
Capital lease obligations		118.2		125.7
Finance obligations		605.0		496.5
Long-term notes		22.3		24.0
Capital leases for equipment and other debt		79.9		2.9
Total long-term debt and capital leases		1,375.4		649.1
Less current portion - Long-term notes, capital leases for equipment and other debt		10.7		6.4
Less current portion - Solar energy systems		30.0		32.1
Long-term portion	$	1,334.7	$	610.6

Senior Notes

On March 10, 2011, we issued $550.0 million of 7.75 % Senior Notes due April 1, 2019 (the "2019 Notes"). We incurred $13.8 million in debt issuance costs, which is amortized into the statement of operations over the eight year term. The 2019 Notes were sold at a price equal to 100% of the principal amount thereof. The interest on the 2019 Notes is payable semi-annually, in cash in arrears, on April 1 and October 1, commencing October 1, 2011. We may redeem the 2019 Notes at our option, in whole or in part, at any time on or after April 1, 2014, upon not less than 30 nor more than 60 days' notice at the redemption prices (expressed as percentages of the principal amount to be redeemed) set forth below, plus any accrued and unpaid interest and additional interest, if any, to the redemption date, if redeemed during the 12-month period beginning on April 1 of the years indicated below.

Year	Price
2014		105.813%
2015		103.875%
2016		101.938%
2017 and thereafter		100.000%

If a change of control of MEMC occurs, each holder of the 2019 Notes will have the right to require us to repurchase all or any part of that holder's notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest and additional interest, if any, to the date of the repurchase.

The 2019 Notes were guaranteed by certain of MEMC's domestic subsidiaries (the "guarantors"). The 2019 Notes are senior unsecured obligations and will be subordinated to all of our and the guarantors' existing and future secured debt.

The indenture governing the 2019 Notes contains covenants that limit our and our subsidiaries' ability, subject to certain exceptions and qualifications, (i) to make certain asset sales, (ii) to make other restricted payments and investments, (iii) to incur indebtedness and issue preferred stock, (iv) to issue dividends, (v) to make other payments affecting restricted subsidiaries, (vi) to enter into certain transactions with affiliates, and (vii) to merge, consolidate or sell substantially all of our assets. These covenants are subject to a number of qualifications and limitations, and in certain situations, a cross default provision. As of June 30, 2011, we were in compliance with all covenants in the indenture governing the 2019 Notes.

In addition, the indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among other things: failure to make payments on the 2019 Notes when due, failure to comply with covenants under the indenture, failure to pay other indebtedness or acceleration of maturity of other indebtedness, failure to satisfy or discharge final judgments and occurrence of bankruptcy events.

Corporate Credit Facility

On March 23, 2011, the Company amended and restated its existing Corporate Credit Facility. The amended facility provides for total borrowings of up to $400 million, has an accordion feature to provide for borrowings of up to $550 million in the aggregate (upon terms to be agreed upon by the parties at the time of such request), and has a three year term. While the original Corporate Credit Facility was secured by a pledge of 65% of the capital stock of certain of our domestic and foreign subsidiaries, the amended and restated Corporate Credit Facility is also secured by substantially all the assets of MEMC and its domestic subsidiaries.

Interest on borrowings under the Corporate Credit Facility will be based on either, at our election, LIBOR plus an initial applicable margin of 2.75% or at a defined prime rate plus an initial applicable margin of 1.75%. The amended facility also provides for the Company to pay various fees, including a commitment fee of 0.50% on the lenders' unused commitments. The amended facility contains covenants which are typical for credit arrangements of this size, including covenants relating to a consolidated interest charge ratio, consolidated leverage ratio and a minimum liquidity ratio. There is also a cross default provision which may be triggered in certain situations.

As part of the amended and restated Corporate Credit Facility, we incurred debt issuance costs of $4.6 million, which is amortized into the statement of operations over the three year term of the facility. As of June 30, 2011, we had no outstanding borrowings under this facility. Outstanding third party letters of credit backed by this facility at such date were $109.8 million. As of June 30, 2011, we were in compliance with all covenants contained in the agreement governing this facility.

Finance and Capital Lease Obligations

We have short-term committed financing arrangements renewable annually of approximately $59.0 million at June 30, 2011, of which there were no short-term borrowings outstanding at June 30, 2011. Of the $59.0 million committed short-term financing arrangements, $37.8 million is unavailable because of the issuance of third party letters of credit. Interest rates are negotiated at the time of the borrowings.

We have additional long-term committed financing arrangements of approximately $1,003.0 million at June 30, 2011, of which $572.3 million is outstanding, including the $550.0 million for the 2019 Notes. Of the $1,003.0 million committed long-term financing arrangements, $125.1 million is unavailable because it relates to the issuance of third party letters of credit. We pay commitment fees of up to 1.0% on the committed loan agreements.

Our solar energy systems for which we have short-term debt, capital lease and finance obligations are included in separate legal entities. The short-term debt, capital lease and finance obligations of $29.0 million, $118.2 million and $605.0 million, respectively, except for $36.6 million of finance obligations, have recourse to those separate legal entities but no recourse to MEMC or the SunEdison parent under the terms of the applicable agreements. These obligations may also include limited guarantees by MEMC or the SunEdison parent related to operations, maintenance and certain indemnities. The recourse finance obligations above are collateralized by the related solar energy system assets.

The capital leases for equipment and other debt of $79.9 million contains $77.6 million that relates to a long-term supply agreement executed in 2008 that conveys to MEMC the right to use specific property, plant and equipment and is therefore considered a lease arrangement. The underlying leased property, plant and equipment was placed into service during the second quarter of 2011, at which time the related assets and corresponding capital lease obligation was capitalized.

On March 31, 2011, one of SunEdison's project subsidiaries signed and executed a master lease agreement with a U.S. financial institution which provides for the sale and simultaneous leaseback of certain solar energy systems constructed by SunEdison. The total capacity under this agreement is $120 million, of which $112.6 million is available as of June 30, 2011. The specified rental payments will be based on projected cash flows that the solar energy systems will generate.

The schedule of principal payments on long-term debt (including consolidated VIEs and excluding solar energy system financing obligations) is as follows:

In millions	As of June  30, 2011
July 1, 2011 through December 31, 2011	$	6.0
2012		46.4
2013		9.2
2014		9.4
2015		9.6
Thereafter		652.9
Total	$	733.5

As of June 30, 2011, the aggregate amounts of minimum lease payments on our financing sale leaseback transactions are $365.0 million. Future payments from 2011 through 2015 are as follows:

In millions	As of June  30, 2011
July 1, 2011 through December 31, 2011	$	21.9
2012	$	28.8
2013	$	27.5
2014	$	25.7
2015	$	23.9

XML



Restructuring and Impairment Charges

6 Months Ended

Jun. 30, 2011

Restructuring and Impairment Charges

Restructuring and Impairment Charges

(2) Restructuring and Impairment Charges

During the three and six months ended June 30, 2011, we recorded restructuring and impairment charges of $13.6 million and $13.8 million, respectively. Of these amounts, $3.6 million and $3.8 million, respectively, relate to the prior 2009 U.S. Plan as discussed below.

During June 2011, MEMC committed to actions to reduce overall manufacturing costs across its global sites as well as to realign certain general and administrative expenses due to industry and customer specific developments (the "2011 Global Plan"). These actions included relocation of certain operations and reductions in headcount. During the quarter ended June 30, 2011, we recorded restructuring charges of $6.8 million for severance and other related employee benefits. In connection with these activities, we also recorded impairment of certain assets totaling $3.2 million. We expect these activities to be completed by December 31, 2012.

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 MEMC's customers in the Asia Pacific region (the "2009 U.S. Plan"). MEMC will provide severance benefits to those employees who will be terminated under the 2009 U.S. Plan. We expect the 2009 U.S. Plan to be completed in the second quarter of 2013, which was extended from 2012. Restructuring expenses for the 2009 Plan recorded in 2011 relate primarily to a third-party supply contract for one of the restructured facilities, which was terminated in the second quarter of 2011. In the three and six-months ended June 30, 2010, we recorded restructuring expenses of $1.4 million and $2.7 million, respectively, primarily for employee benefits and equipment moving costs related to the 2009 U.S. Plan.

Details of expenses related to the 2009 U.S. Plan are set forth in the following table:

										As of June 30, 2011
In millions	Accrued, December  31, 2010		Year-to-Date Restructuring Charges		Cash Payments			Accrued, June 30, 2011		Cumulative Costs Incurred		Total Costs Expected to be Incurred
2009 U.S. Plan
Severance and other employee benefits	$	16.2	$	0.1	$	(1.1	)	$	15.2	$	18.3	$	19.2
Asset move costs		—		0.8		(0.8	)		—		4.0		20.3
Contract termination		—		2.9		—			2.9		2.9		2.9
Infrastructure costs		—		—		—			—		—		4.0
Total	$	16.2	$	3.8	$	(1.9	)	$	18.1	$	25.2	$	46.4

XML



Debt and Capital Lease Obligations (Tables)

6 Months Ended

Jun. 30, 2011

Debt and Capital Lease Obligations

Debt

	As of June 30,		As of December 31,
In millions	2011		2010
Short-term debt:
Solar energy systems, weighted average interest rate of 6.15% and 6.13%, respectively	$	29.0	$	33.6
Long-term debt and capital leases:
Senior notes	$	550.0	$	—
Solar energy systems:
Capital lease obligations		118.2		125.7
Finance obligations		605.0		496.5
Long-term notes		22.3		24.0
Capital leases for equipment and other debt		79.9		2.9
Total long-term debt and capital leases		1,375.4		649.1
Less current portion - Long-term notes, capital leases for equipment and other debt		10.7		6.4
Less current portion - Solar energy systems		30.0		32.1
Long-term portion	$	1,334.7	$	610.6

Redemption Prices

Year	Price
2014		105.813%
2015		103.875%
2016		101.938%
2017 and thereafter		100.000%

Principal Payments on Long-term Debt

In millions	As of June  30, 2011
July 1, 2011 through December 31, 2011	$	6.0
2012		46.4
2013		9.2
2014		9.4
2015		9.6
Thereafter		652.9
Total	$	733.5

Aggregate Amounts of Minimum Lease Payments

In millions	As of June  30, 2011
July 1, 2011 through December 31, 2011	$	21.9
2012	$	28.8
2013	$	27.5
2014	$	25.7
2015	$	23.9

XML



Solar Energy Systems Held for Development and Sale

6 Months Ended

Jun. 30, 2011

Solar Energy Systems Held For Development and Sale

Solar Energy Systems Held for Development and Sale

(8) Solar Energy Systems Held for Development and Sale

Solar energy systems held for development and sale consist of the following:

	As of		As of
In millions	June 30, 2011		December 31, 2010
Under development	$	183.0	$	68.8
Systems held for sale		43.5		168.7
	$	226.5	$	237.5

XML



Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

13) Income Taxes

In general, we record income tax expense each quarter based on our best estimate as to the full year's effective tax rate. This estimated tax expense is reported based on a pro-ration of the actual income earned in the period divided by the full year forecasted income. There are certain items, however, which are given discrete period treatment and the tax effects of those items are reported in the quarter that such event arises. Items that give rise to discrete recognition include (but are not limited to) finalizing tax authority examinations, changes in statutory tax rates and expiration of a statute of limitations.

The process for calculating income tax expense includes estimating current taxes due and assessing temporary differences between the recognition of assets and liabilities for tax and financial statement reporting purposes. We regularly review our deferred tax assets for realizability, taking into consideration all available evidence, both positive and negative, including historical pre-tax and taxable income (losses), projected future pre-tax and taxable income (losses), the expected timing of the reversals of existing temporary differences and tax planning strategies. We presently have a three year cumulative loss in the U.S. for income tax accounting purposes and are relying upon projected future pre-tax and taxable income of our restructured U.S. operations and tax planning strategies in determining the realization of the deferred tax assets. The tax planning strategies include altering the timing and amount of payments from non-U.S. subsidiaries to our U.S. operations. Of the cash, cash equivalents, and short-term investments at June 30, 2011, approximately $297.4 million was held by our foreign subsidiaries and are subject to repatriation tax effects. Reliance on these strategies resulted in the determination that an additional $7.2 million of deferred tax assets would be realized with a corresponding reduction of a valuation allowance on the U.S. deferred tax assets. In arriving at these judgments, the weight given to the potential effect of all positive and negative evidence is commensurate with the extent to which it can be objectively verified. The total deferred tax assets as of June 30, 2011 and December 31, 2010 were $245.4 million and $172.7 million, respectively.

We are subject to income taxes in the United States and numerous foreign jurisdictions. From time to time, we are subject to income tax audits in these jurisdictions. We believe that our tax return positions are fully supported, but tax authorities are likely to challenge certain positions, which may not be fully sustained. Our income tax expense includes amounts intended to satisfy income tax assessments that may result from these challenges. Determining the income tax expense for these potential assessments and recording the related assets and liabilities requires significant judgments and estimates. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. We review our liabilities quarterly, and we may adjust such liabilities due to proposed assessments by tax authorities, changes in facts and circumstances, issuance of new regulations or new case law, negotiations between tax authorities of different countries concerning our transfer prices, the resolution of entire audits, or the expiration of statutes of limitations. Adjustments, if required, are most likely to occur in the year during which major audits are closed. The total reserve for uncertain tax positions increased $13.1 million during the six months ended June 30, 2011 due to tax benefits claimed by certain foreign subsidiaries. A majority of these exposures relate to timing differences and accordingly, the offset was primarily recorded to deferred taxes. The total reserve for uncertain tax positions as of June 30, 2011 and December 31, 2010 were $45.2 million and $32.1 million, respectively.

We are currently under examination by the IRS for the 2008 and 2009 tax years. Additionally, due to the carryback of our 2009 net operating loss for utilization against the 2007 tax liability, the IRS has re-opened the 2007 tax year for further review. We believe 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 estimable at this time.

XML



Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended		6 Months Ended				6 Months Ended		1 Months Ended	6 Months Ended		6 Months Ended
	Mar. 02, 2011	Jun. 30, 2011	Mar. 31, 2011	Jun. 30, 2011	Aug. 03, 2011	Dec. 31, 2010	Jan. 12, 2010	Jun. 30, 2011 Maximum [Member] Solaicx [Member]	Jun. 30, 2011 Minimum [Member] Solaicx [Member]	Feb. 01, 2011 SunEdison [Member]	Jun. 30, 2011 SunEdison [Member]	Dec. 31, 2010 SunEdison [Member]	Jun. 30, 2011 Solaicx [Member]
Refundable deposits		$ 55.8		$ 55.8		$ 88.7
Cost of goods sold, purchase obligations		52.4		52.4
Recorded gain on hedges		14.2		14.2
Contingent consideration related to acquisitions		51.0		51.0	(1.9)	106.4						80.2
Contingent consideration paid in cash					112.0					55.7
Contingent consideration common stock issued										2.1
Amount payable based on achieving revenues								71.8	60.0
Additional payment combination of cash and common stock													27.6
Additional payments under the terms of the lease agreements to indemnify sale leaseback				6.7
Guaranteed the uptime availability of the system over the term of the arrangement, years											20
Breach of contract claim, awarding damages to Semi-Materials	19.0
Breach of contract claim, awarding damages to Semi-Materials previously recorded	5.1
Additional marketing and administration expenses as a result of the jury verdict pending the appeal			13.9
Respective claims for breach of contract against MEMC Pasadena, awarding verdict							$ 0.2

XML



Investments

6 Months Ended

Jun. 30, 2011

Investments

Investments

(9) Investments

Joint Venture Investments

We have made investments in our joint ventures totaling $86.2 million as of June 30, 2011. Generally, the joint ventures are for capacity in our Solar Materials segment. The total amount of our remaining contractual investment commitment to our joint ventures as of June 30, 2011 is up to an additional $179.4 million. There is no contractually specified time period for a significant portion of these commitments.

Zhenjiang Huantai (formerly Jiangsu Huantai) Joint Venture

In May 2010, we entered into an equity method joint venture with Zhenjiang Huantai Silicon Science Ltd. Co. (formerly Jiangsu Huantai Group Co. Ltd) for the manufacture of multicrystalline ingots and wafers in Yangzhong City, Jiangsu Province, China (the "Zhenjiang Huantai JV"). During the quarter ended March 31, 2011, MEMC made an equity contribution of $17.8 million and provided a short-term loan of $3.1 million to the joint venture for working capital requirements. No such contributions were made during the quarter ended June 30, 2011. MEMC's total equity investment balance was $58.1 million at June 30, 2011 and $10.0 million at June 30, 2010.

Samsung Fine Chemicals Joint Venture

In February 2011, we entered into a joint venture with Samsung Fine Chemicals Co. Ltd. for the construction and operation of a new facility to produce high purity polysilicon in Ulsan, South Korea. The joint venture will manufacture and supply polysilicon to MEMC and to the international markets. MEMC Singapore Pte. Ltd's. ownership of the joint venture will be 50% and Samsung Fine Chemicals Co. Ltd will own the other 50%. MEMC's total commitments are expected to be $175.0 million through 2012. During the second quarter of 2011, the Company invested $13.8 million in the joint venture, which represents our investment at June 30, 2011.

Investments Recorded at Fair Value

As of June 30, 2011 and December 31, 2010, the only investment recorded at fair value was an equity security investment in the common stock of a customer (Gintech), which investment is classified as a long-term available for sale investment. As of June 30, 2011 and December 31, 2010, the fair value of the investment was $35.4 million and $41.1 million, respectively. The cost basis in the investment is $12.4 million.

The carrying value of short-term and long-term investments consists of the following:

	As of		As of
In millions	June 30, 2011		December 31, 2010
Items measured at fair value on a recurring basis	$	35.4	$	41.1
Equity method investments		86.2		46.1
Time deposits		0.2		0.1
Equity investments at cost		23.6		23.1
Total investments		145.4		110.4
Less: short-term investments		0.2		0.1
Non-current investments	$	145.2	$	110.3

There have been no other-than-temporary impairments on our cost method investments during the six months ended June 30, 2011. We have assessed and determined that there have been no events or circumstances that had a material adverse effect on the investments during this period.

XML



Solar Energy Systems Held for Development and Sale (Tables)

6 Months Ended

Jun. 30, 2011

Solar Energy Systems Held For Development and Sale

Solar Energy Systems Held for Development and Sale

	As of		As of
In millions	June 30, 2011		December 31, 2010
Under development	$	183.0	$	68.8
Systems held for sale		43.5		168.7
	$	226.5	$	237.5

XML



Inventories

6 Months Ended

Jun. 30, 2011

Inventories

Inventories

(7) Inventories

Inventories consist of the following:

	As of		As of
In millions	June 30, 2011		December 31, 2010
Raw materials and supplies	$	144.8	$	104.8
Goods and work in process		103.2		58.0
Finished goods		87.4		51.8
	$	335.4	$	214.6

Due to the earthquake in Japan on March 11, 2011, wafer production in our semiconductor wafer plant in Japan was suspended from that time through April 12, 2011. Because of the unplanned downtime, we recorded $7.2 million and $14.9 million in the three and six months ended June 30, 2011, respectively, as period charges to cost of goods sold for the under absorption of production costs resulting in variances and inventory adjustments. We had no similar adjustments during the first six months of 2010. 

We recorded charges of approximately $14.2 million in the quarter ended June 30, 2011 primarily related to our Kuching solar wafering plant as it ramps to full capacity.

XML



Inventories (Narrative) (Details) (USD $) In Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Jun. 30, 2010
Earthquake charges	$ 7.2	$ 14.9	$ 0
Kuching Solar Wafering Plant [Member]
Charges related to low volumes at solar wafering plant	$ 14.2

XML



Condensed Consolidated Statements of Cash Flows (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net income	$ 57.1	$ 6.3
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	104.6	76.1
Stock-based compensation	21.0	29.0
Benefit for deferred taxes	(69.1)	(13.9)
Deferred revenue recognized	(40.9)	(0.7)
Impairment on deposits for take-or-pay agreements	50.2
Decline in fair value of warrant	0.3	12.1
Change in accounts receivable	8.5	(108.4)
Change in accounts payable	(38.6)	62.8
Change in inventories	(115.2)	6.3
Changes in income taxes receivable and payable	44.5	41.6
Deferred revenue for solar energy systems	49.9	6.1
Working capital and other	(98.7)	(108.6)
Net cash (used in) provided by operating activities	(26.4)	8.7
Cash flows from investing activities:
Capital expenditures	(308.1)	(141.1)
Construction of solar energy systems	(226.7)	(111.7)
Proceeds from sale and maturities of investments		146.8
Purchases of equity method investments	(49.3)	(10.0)
Proceeds from return of equity method investment	13.7	77.6
Restricted cash	(15.9)	6.0
Payments to vendors for refundable deposits on long-term agreements	(18.8)	(28.0)
Proceeds from sale of property, plant and equipment	37.1
Cash paid for acquisitions, net of cash acquired	(28.7)
Cash received from net investment hedges		18.5
Other	(0.6)	2.7
Net cash used in investing activities	(597.3)	(39.2)
Cash flows from financing activities:
Proceeds from senior notes issuance	550.0
Cash paid for SunEdison acquisition contingent consideration	(50.2)
Proceeds from financing obligations	217.6	106.6
Repayments of financing and capital lease obligations	(66.9)	(15.8)
Net repayments of customer deposits related to long-term supply agreements	(51.2)	(27.7)
Principal payments on long-term debt	(1.8)	(3.0)
Common stock issued and repurchased	(2.7)	(0.3)
Proceeds from noncontrolling interests		9.7
Return of investment and dividends to noncontrolling interest	(15.2)
Debt financing fees	(23.4)	(9.0)
Net cash provided by financing activities	556.2	60.5
Effect of exchange rate changes on cash and cash equivalents	12.1	(9.7)
Net (decrease) increase in cash and cash equivalents	(55.4)	20.3
Cash and cash equivalents at beginning of period	707.3	632.7
Cash and cash equivalents at end of period	651.9	653.0
Supplemental schedule of non-cash financing activity:
Debt transferred to and assumed by buyer upon sale of solar energy systems A capital lease obligation of $78.9 was incurred when the Company entered into a lease for new property, plant and equipment during the six months ended June 30, 2011	$ 66.1	$ 43.3

XML



Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

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 June 30, 2011											As of December 31, 2010
Assets (liabilities) in millions	Level 1		Level 2			Level 3			Total			Level 1			Level 2			Level 3			Total
Available for sale investments	$	—	$	35.4		$	—		$	35.4		$	—		$	41.1		$	—		$	41.1
Suntech warrant		—		—			4.9			4.9			—			—			5.2			5.2
Interest rate swaps and option thereon		—		(2.8	)		—			(2.8	)		—			(4.3	)		—			(4.3	)
Currency forward contracts		12.8		—			—			12.8			(7.0	)		—			—			(7.0	)
Other derivatives		—		—			1.8			1.8			—			—			1.6			1.6
Contingent consideration related to acquisitions		—		—			(51.0	)		(51.0	)		(80.2	)					(26.2	)		(106.4	)
Total	$	12.8	$	32.6		$	(44.3	)	$	1.1		$	(87.2	)	$	36.8		$	(19.4	)	$	(69.8	)

The Suntech warrant consists of a fully vested, non-forfeitable warrant to purchase common shares of Suntech, a customer, which was received at the time that MEMC signed a long-term supply agreement with Suntech. 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 the making of estimates and assumptions, including Suntech's stock price volatility, interest rate, dividends, marketability and expected return requirements. The Suntech warrant is considered a derivative and, accordingly, changes in the value of the warrant are recorded in non-operating (income) expense.

We have estimated the fair value of the contingent consideration related to acquisitions at $51.0 million as of June 30, 2011, which reflects a discount at a credit adjusted interest rate for the period of the contingency. That measure is based on significant inputs that are not observable in the market, which U.S. GAAP refers to as Level 3 inputs. Key assumptions include (i) a discount percentage and (ii) a probability adjustment related to the entities ability to meet operational metrics.

The carrying amount of our outstanding short-term debt, long-term debt and capital lease obligations at June 30, 2011 and December 31, 2010 was $1,404.4 million and $682.7 million, respectively. The estimated fair value of that debt and capital lease obligations was $1,153.6 million and $510.4 million at June 30, 2011 and December 31, 2010, respectively. Fair value of our debt, excluding the 2019 Notes, is calculated using a discounted cash flow model with consideration for our non-performance risk. The estimated fair value of our 2019 Notes was based upon a broker quotation. Our debt primarily consists of non-recourse solar energy system financing at SunEdison and our 2019 Notes as described in Note 11.

As of December 31, 2010, we recorded $80.2 million of contingent consideration for the SunEdison acquisition. This liability was paid on February 1, 2011 based on achievement of the earnout performance objectives for a combination of $55.7 million in cash and the issuance of 2.1 million shares in MEMC common stock. That measure was based on the cash amount and the stock price at the date of issuance, which U.S. GAAP refers to as Level 1 inputs.

There were no transfers into or out of Level 1 and Level 2 financial instruments during the six months ended June 30, 2011 other than the SunEdison contingent consideration payment of $80.2 million and the extinguishment of derivative liabilities of $2.1 million.

The following table summarizes changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the six months ended June 30, 2010 and June 30, 2011:

In millions	Available for Sale Investments			Trading Investments			Auction Rate Securities Right			Suntech Warrant			Contingent consideration related to acquisitions			Other Derivatives		Total
Balance at December 31, 2009	$	11.6		$	38.4		$	2.0		$	19.2		$	(77.4	)	$	—	$	(6.2	)
Total unrealized gains (losses) included inearnings(1)		—			0.3			(1.8	)		(12.1	)		(4.7	)		—		(18.3	)
Total unrealized gains included in other comprehensive income, net		0.2			—			—			—			—			—		0.2
Sales, redemptions and maturities		(9.2	)		(32.9	)		—			—			—			—		(42.1	)
Transfers out of Level 3, net		(2.6	)		—			—			—			—			—		(2.6	)
Balance at June 30, 2010	$	—		$	5.8		$	0.2		$	7.1		$	(82.1	)	$	—	$	(69.0	)
Balance at December 31, 2010	$	—		$	—		$	—		$	5.2		$	(26.2	)	$	1.6	$	(19.4	)
Total unrealized (losses) gains included in earnings(1)		—			—			—			(0.3	)		6.2			0.2		6.1
Acquisitions		—			—			—			—			(31.0	)		—		(31.0	)
Balance at June 30, 2011	$	—		$	—		$	—		$	4.9		$	(51.0	)	$	1.8	$	(44.3	)
The amount of total (losses) gains for the six months ended June 30, 2011 included in earnings attributable to the change in unrealized (losses) gains relating to assets and liabilities still held at the reporting date	$	—		$	—		$	—		$	(0.3	)	$	6.2		$	0.2	$	6.1

⁽¹⁾  Amounts included in earnings are recorded to non-operating expense (income) in the consolidated statements of operations, except for the amount included in marketing and administration for the contingent consideration related to acquisitions, for which changes to the fair value were recorded to operating income (loss) in the consolidated statement of operations.

XML



Condensed Consolidating Financial Information (Tables)

3 Months Ended

6 Months Ended

12 Months Ended

Jun. 30, 2011

Jun. 30, 2010

Jun. 30, 2011

Jun. 30, 2010

Dec. 31, 2010

Condensed Consolidating Financial Information

Schedule of Condensed Consolidating Statement of Operations

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	232.1		$	111.4		$	1,057.5		$	(655.4	)	$	745.6
Cost of goods sold		236.2			99.2			876.9			(647.8	)		564.5
Gross margin		(4.1	)		12.2			180.6			(7.6	)		181.1
Operating expenses:
Marketing and administration		37.1			20.5			36.4			—			94.0
Research and development		15.6			2.1			4.1			—			21.8
Restructuring and impairment charges		6.5			0.4			6.7			—			13.6
Operating (loss) income		(63.3	)		(10.8	)		133.4			(7.6	)		51.7
Non-operating (income) expense:
Interest expense		11.1			0.2			9.5			0.4			21.2
Interest income		(0.1	)		(0.2	)		(0.2	)		(0.4	)		(0.9	)
Decline in fair value of warrant		—			—			1.9			—			1.9
Other, net		(12.3	)		(2.1	)		(7.3	)		4.5			(17.2	)
Total non-operating (income) expense		(1.3	)		(2.1	)		3.9			4.5			5.0
(Loss) income before income tax (benefit) expense, equity in (loss) earnings of joint venture and investment in subsidiary earnings		(62.0	)		(8.7	)		129.5			(12.1	)		46.7
Income tax (benefit) expense		(30.5	)		13.2			19.5			(1.3	)		0.9
(Loss) income before equity in (loss) earnings of joint venture and investment in subsidiary earnings		(31.5	)		(21.9	)		110.0			(10.8	)		45.8
Investment in subsidiary earnings		78.9			95.2			—			(174.1	)		—
Equity in (loss) earnings of joint venture, net of tax		(0.1	)		—			2.1			—			2.0
Net income		47.3			73.3			112.1			(184.9	)		47.8
Net loss (income) attributable to noncontrolling interests		—			0.1			(0.6	)		—			(0.5	)
Net income attributable to MEMC stockholders	$	47.3		$	73.4		$	111.5		$	(184.9	)	$	47.3

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	209.7		$	87.7		$	508.3		$	(357.4	)	$	448.3
Cost of goods sold		207.5			73.0			438.0			(347.1	)		371.4
Gross profit		2.2			14.7			70.3			(10.3	)		76.9
Operating expenses:
Marketing and administration		34.6			13.8			24.2			—			72.6
Research and development		8.1			1.1			2.3			—			11.5
Restructuring charges		1.4			—			—			—			1.4
Insurance recovery		—			(11.9	)		—			—			(11.9	)
Operating (loss) income		(41.9	)		11.7			43.8			(10.3	)		3.3
Non-operating (income) expense:
Interest expense		(0.5	)		1.1			6.2			(0.8	)		6.0
Interest income		—			(0.9	)		(1.7	)		0.8			(1.8	)
Decline in fair value of warrant		—			—			6.8			—			6.8
Other, net		(24.3	)		0.4			8.3			8.6			(7.0	)
Total non-operating (income) expense		(24.8	)		0.6			19.6			8.6			4.0
(Loss) income before income tax (benefit) expense and investment in subsidiary earnings (loss)		(17.1	)		11.1			24.2			(18.9	)		(0.7	)
Income tax (benefit) expense		(13.7	)		(4.6	)		4.6			(2.4	)		(16.1	)
(Loss) income before investment in subsidiary earnings (loss)		(3.4	)		15.7			19.6			(16.5	)		15.4
Investment in subsidiary earnings (loss)		17.2			(5.4	)		—			(11.8	)		—
Net income		13.8			10.3			19.6			(28.3	)		15.4
Net income attributable to noncontrolling interests		—			(0.3	)		(1.3	)		—			(1.6	)
Net income attributable to MEMC stockholders	$	13.8		$	10.0		$	18.3		$	(28.3	)	$	13.8

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	440.4		$	252.2		$	1,947.6		$	(1,158.7	)	$	1,481.5
Cost of goods sold		452.3			244.6			1,627.0			(1,137.5	)		1,186.4
Gross margin		(11.9	)		7.6			320.6			(21.2	)		295.1
Operating expenses:
Marketing and administration		81.8			43.0			62.2			—			187.0
Research and development		30.8			4.2			7.8			—			42.8
Restructuring and impairment charges		6.7			0.4			6.7			—			13.8
Operating (loss) income		(131.2	)		(40.0	)		243.9			(21.2	)		51.5
Non-operating (income) expense:
Interest expense		14.3			0.6			16.0			(0.7	)		30.2
Interest income		(0.2	)		(0.4	)		(1.9	)		0.7			(1.8	)
Decline in fair value of warrant		—			—			0.3			—			0.3
Other, net		(22.7	)		(1.3	)		(0.2	)		6.6			(17.6	)
Total non-operating (income) expense		(8.6	)		(1.1	)		14.2			6.6			11.1
(Loss) income before income tax (benefit) expense, equity in earnings of joint venture and investment in subsidiary earnings		(122.6	)		(38.9	)		229.7			(27.8	)		40.4
Income tax (benefit) expense		(44.7	)		0.9			31.3			(0.9	)		(13.4	)
(Loss) income before equity in (loss) earnings of joint venture and investment in subsidiary earnings		(77.9	)		(39.8	)		198.4			(26.9	)		53.8
Investment in subsidiary earnings		120.8			112.4			—			(233.2	)		—
Equity in (loss) earnings of joint venture, net of tax		(0.1	)		—			3.4			—			3.3
Net income		42.8			72.6			201.8			(260.1	)		57.1
Net loss (income) attributable to noncontrolling interests		—			0.1			(14.4	)		—			(14.3	)
Net income attributable to MEMC stockholders	$	42.8		$	72.7		$	187.4		$	(260.1	)	$	42.8

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	408.3		$	168.2		$	1,010.5		$	(701.0	)	$	886.0
Cost of goods sold		405.5			150.7			882.1			(688.5	)		749.8
Gross profit		2.8			17.5			128.4			(12.5	)		136.2
Operating expenses:
Marketing and administration		63.4			28.4			43.0			—			134.8
Research and development		16.3			1.9			4.4			—			22.6
Restructuring charges		2.7			—			—			—			2.7
Insurance recovery		—			(11.9	)		—			—			(11.9	)
Operating (loss) income		(79.6	)		(0.9	)		81.0			(12.5	)		(12.0	)
Non-operating (income) expense:
Interest expense		(1.1	)		2.3			19.4			(2.5	)		18.1
Interest income		(0.1	)		(2.4	)		(4.1	)		2.5			(4.1	)
Decline in fair value of warrant		—			—			12.1			—			12.1
Other, net		(28.8	)		0.3			13.1			9.0			(6.4	)
Total non-operating (income) expense		(30.0	)		0.2			40.5			9.0			19.7
(Loss) income before income tax benefit, equity in (loss) earnings of joint venture and investment in subsidiary earnings (loss)		(49.6	)		(1.1	)		40.5			(21.5	)		(31.7	)
Income tax (benefit) expense		(31.2	)		(4.1	)		8.0			(3.4	)		(30.7	)
(Loss) income before equity in (loss) earnings of joint venture and investment in subsidiary earnings (loss)		(18.4	)		3.0			32.5			(18.1	)		(1.0	)
Investment in subsidiary earnings		24.1			(8.5	)		—			(15.6	)		—
Equity in (loss) earnings of joint venture, net of tax		(1.5	)		—			8.8			—			7.3
Net income (loss)		4.2			(5.5	)		41.3			(33.7	)		6.3
Net income attributable to noncontrolling interests		—			(0.3	)		(1.8	)		—			(2.1	)
Net income (loss) attributable to MEMC stockholders	$	4.2		$	(5.8	)	$	39.5		$	(33.7	)	$	4.2

Schedule of Condensed Consolidating Balance Sheet

Unaudited Condensed Consolidating Balance Sheet

June 30, 2011

(In millions, except per share data)

	MEMC, Inc		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	209.8	$	17.3		$	424.8	$	—		$	651.9
Restricted cash		—		0.5			37.6		—			38.1
Accounts receivable, net		72.3		15.2			185.4					272.9
Inventories		44.5		107.7			274.5		(91.3	)		335.4
Solar energy systems held for development and sale		—		43.3			197.5		(14.3	)		226.5
Income taxes receivable		19.2		—			6.4		—			25.6
Prepaid and other current assets		22.5		6.0			240.7		—			269.2
Total current assets		368.3		190.0			1,366.9		(105.6	)		1,819.6
Investments		2.8		5.0			137.4					145.2
Investments in subsidiaries		1,878.5		1,018.1			—		(2,896.6	)		—
Property, plant and equipment, net:
Semiconductor and Solar Materials, net		83.2		325.3			1,298.6		(29.6	)		1,677.5
Solar energy systems, net		—		49.2			590.0		100.8			740.0
Deferred tax assets, net		138.2		(27.7	)		100.8		—			211.3
Restricted cash		—		0.2			19.8		—			20.0
Other assets		41.6		25.3			161.9		—			228.8
Goodwill		—		342.7			62.2		—			404.9
Intangible assets, net		—		46.9			3.2		—			50.1
Total assets	$	2,512.6	$	1,975.0		$	3,740.8	$	(2,931.0	)	$	5,297.4

Unaudited Condensed Consolidating Balance Sheet

June 30, 2011

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	—		$	2.0		$	8.7		$	—		$	10.7
Short-term solar energy system financing, current portion of solar energy system financing and capital lease obligations		—			0.2			58.8			—			59.0
Accounts payable		19.8			81.2			507.4			—			608.4
Accrued liabilities		67.5			28.3			84.8			—			180.6
Contingent consideration related to acquisitions		—			46.0			5.0			—			51.0
Accrued wages and salaries		15.7			11.9			29.9			—			57.5
Deferred revenue for solar energy systems		—			5.8			22.0			—			27.8
Customer deposits		4.2			0.6			55.4			—			60.2
Intercompany (receivable) payable and short term notes		(411.9	)		414.6			(2.7	)		—			—
Income taxes payable		(16.1	)		(4.5	)		100.8			—			80.2
Total current liabilities		(320.8	)		586.1			870.1			—			1,135.4
Long-term debt and capital lease obligations, less current portion		550.0			—			91.5			—			641.5
Long-term solar energy system financing and capital lease obligations, less current portion		—			1.9			691.3			—			693.2
Pension and post-employment liabilities		24.2			—			31.9			—			56.1
Deferred revenue for solar energy systems		—			1.0			111.7			—			112.7
Semiconductor and Solar Materials deferred revenue		—			—			52.7			—			52.7
Long-term intercompany note (receivable) payable		(163.1	)		(24.6	)		187.7			—			—
Other liabilities		44.5			5.5			129.4			—			179.4
Total liabilities		134.8			569.9			2,166.3			—			2,871.0
Total MEMC stockholders' equity		2,377.8			1,405.1			1,525.9			(2,931.0	)		2,377.8
Noncontrolling interests		—			—			48.6			—			48.6
Total stockholders' equity		2,377.8			1,405.1			1,574.5			(2,931.0	)		2,426.4
Total liabilities and stockholders' equity	$	2,512.6		$	1,975.0		$	3,740.8		$	(2,931.0	)	$	5,297.4

Unaudited Condensed Consolidating Balance Sheet

December 31, 2010

(In millions, except per share data)

	MEMC, Inc		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	15.5	$	7.2		$	684.6	$	—		$	707.3
Restricted cash		10.7		0.5			32.6		—			43.8
Accounts receivable, net		87.5		8.0			200.5		—			296.0
Inventories		33.3		59.0			163.2		(40.9	)		214.6
Solar energy systems held for development and sale		—		8.6			235.8		(6.9	)		237.5
Income taxes receivable		16.7		17.4			1.5		—			35.6
Prepaid and other current assets		19.0		9.2			174.3		—			202.5
Total current assets		182.7		109.9			1,492.5		(47.8	)		1,737.3
Investments		2.3		15.4			95.0		(2.4	)		110.3
Investments in subsidiaries		1,758.8		911.5			—		(2,670.3	)		—
Property, plant and equipment, net:
Semiconductor and Solar Materials, net		78.5		328.7			1,083.4		(24.7	)		1,465.9
Solar energy systems, net		—		4.2			511.9		51.5			567.6
Deferred tax assets, net		138.1		(27.7	)		28.9		—			139.3
Restricted cash		—		0.2			18.5		—			18.7
Other assets		25.2		19.9			132.5		—			177.6
Goodwill		—		342.7			—		—			342.7
Intangible assets, net		—		52.5			—		—			52.5
Total assets	$	2,185.6	$	1,757.3		$	3,362.7	$	(2.693.7	)	$	4,611.9

Unaudited Condensed Consolidating Balance Sheet

December 31, 2010

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	—		$	2.8		$	3.6		$	—		$	6.4
Short-term solar energy system financing, current portion of solar energy system financing and capital lease obligations		—			0.3			65.4			—			65.7
Accounts payable		20.9			115.9			608.7			—			745.5
Accrued liabilities		44.9			39.3			81.2			—			165.4
Contingent consideration related to acquisitions		—			106.4			—			—			106.4
Accrued wages and salaries		15.6			9.3			25.5			—			50.4
Deferred revenue for solar energy systems		—			—			8.8			—			8.8
Customer deposits		0.1			0.6			92.2			—			92.9
Intercompany (receivable) payable and short-term notes		(93.9	)		131.9			(38.0	)		—			—
Income taxes payable		11.0			(14.0	)		45.6			—			42.6
Total current liabilities		(1.4	)		392.5			893.0			—			1,284.1
Long-term debt and capital lease obligations, less current portion		—			—			20.5			—			20.5
Long-term solar energy system financing and capital lease obligations, less current portion		—			3.9			586.2			—			590.1
Pension and post-employment liabilities		28.6			—			25.5			—			54.1
Deferred revenue for solar energy systems		—			0.7			74.3			—			75.0
Semiconductor and Solar Materials deferred revenue		—			—			115.2			—			115.2
Long-term intercompany note (receivable) payable		(125.2	)		(23.6	)		148.8			—			—
Other liabilities		31.9			2.8			142.6			—			177.3
Total liabilities		(66.1	)		376.3			2,006.1			—			2,316.3
Total MEMC stockholders' equity		2,251.7			1,381.0			1,312.7			(2,693.7	)		2,251.7
Noncontrolling interests		—			—			43.9			—			43.9
Total stockholders' equity		2,251.7			1,381.0			1,356.6			(2,693.7	)		2,295.6
Total liabilities and stockholders' equity	$	2,185.6		$	1,757.3		$	3,362.7		$	(2,693.7	)	$	4,611.9

Condensed Consolidating Statement of Cash Flows

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	(332.3	)		24.2			183.5			98.2		$	(26.4	)
Cash flows from investing activities:
Purchases of cost and equity method investments		(0.5	)		(5.0	)		(43.8	)		—			(49.3	)
Capital expenditures		(14.4	)		(16.0	)		(277.7	)		—			(308.1	)
Construction of solar energy systems		—			—			(122.5	)		(104.2	)		(226.7	)
Restricted cash		—			—			(15.9	)		—			(15.9	)
Proceeds from sale of property, plant and equipment		—			—			37.1			—			37.1
Cash paid for acquisition, net of cash acquired		—			(28.7	)					—			(28.7	)
Payments to vendors for deposits and loans		—			(14.4	)		(4.4	)		—			(18.8	)
Equity infusions or investments in subsidiaries		—			—			—			—			—
Proceeds from return of equity method investments		—			13.7			—			—			13.7
Other		1.0			0.4			(8.0	)		6.0			(0.6	)
Net cash used in investing activities		(13.9	)		(50.0	)		(435.2	)		(98.2	)		(597.3	)
Cash flows from financing activities:
Senior notes issuance		550.0			—			—			—			550.0
Net repayments of customer deposits related to long-term supply agreements		—			(0.9	)		(50.3	)		—			(51.2	)
Cash paid for SunEdison acquisition contingent consideration		—			(50.2	)		—			—			(50.2	)
Collection on (repayments of) intercompany debt		11.2			88.9			(100.1	)		—			—
Principal payments on long term debt		—			—			(1.8	)		—			(1.8	)
Proceeds from financing obligations		—			—			217.6			—			217.6
Repayments of financing and capital lease obligations		—			(1.8	)		(65.1	)		—			(66.9	)
Common stock repurchased		(2.7	)		—			—			—			(2.7	)
Return of investment and dividends to noncontrolling interest		—			—			(15.2	)		—			(15.2	)
Debt financing fees		(18.0	)		—			(5.4	)		—			(23.4	)
Net cash provided by (used in) financing activities		540.5			36.0			(20.3	)		—			556.2
Effect of exchange rate changes on cash and cash equivalents		—			(0.1	)		12.2			—			12.1
Net increase (decrease) in cash and cash equivalents		194.3			10.1			(259.8	)		—			(55.4	)
Cash and cash equivalents at beginning of period		15.5			7.2			684.6			—			707.3
Cash and cash equivalents at end of period	$	209.8		$	17.3		$	424.8		$	—		$	651.9

XML



Inventories (Tables)

6 Months Ended

Jun. 30, 2011

Inventories

Inventories

	As of		As of
In millions	June 30, 2011		December 31, 2010
Raw materials and supplies	$	144.8	$	104.8
Goods and work in process		103.2		58.0
Finished goods		87.4		51.8
	$	335.4	$	214.6

XML



Goodwill and Intangible Assets (Intangible Assets) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2011		Dec. 31, 2010
Amortizable intangible assets, Gross Carrying Amount	$ 47.0		$ 45.4
Indefinite lived assets, Gross Carrying Amount	20.1		18.3
Amortizable intangible assets, Accumulated Amortization or Allocated to Solar Energy System	(10.4)		(6.3)
Indefinite lived assets, Accumulated Amortization or Allocated to Solar Energy System	(6.6)		(4.9)
Amortizable intangible assets, Net Carrying Amount	36.6		39.1
Indefinite lived assets, Net Carrying Amount	13.5		13.4
Amount included in customer relationships intangible assets	7.1
Favorable Energy Credits [Member]
Amortizable intangible assets, Weighted-Average Amortization Period	7
Amortizable intangible assets, Gross Carrying Amount	14.2		14.2
Amortizable intangible assets, Accumulated Amortization or Allocated to Solar Energy System	(4.7)		(3.2)
Amortizable intangible assets, Net Carrying Amount	9.5		11.0
Customer Relationships [Member]
Amortizable intangible assets, Weighted-Average Amortization Period	6	[1]
Amortizable intangible assets, Gross Carrying Amount	6.5	[1]	5.4	[1]
Amortizable intangible assets, Accumulated Amortization or Allocated to Solar Energy System	(1.4)	[1]	(0.8)	[1]
Amortizable intangible assets, Net Carrying Amount	5.1	[1]	4.6	[1]
Trade Name [Member]
Amortizable intangible assets, Weighted-Average Amortization Period	15
Amortizable intangible assets, Gross Carrying Amount	4.1		4.1
Amortizable intangible assets, Accumulated Amortization or Allocated to Solar Energy System	(0.4)		(0.3)
Amortizable intangible assets, Net Carrying Amount	3.7		3.8
Internally Developed Software [Member]
Amortizable intangible assets, Weighted-Average Amortization Period	3
Amortizable intangible assets, Gross Carrying Amount	1.8		1.3
Amortizable intangible assets, Accumulated Amortization or Allocated to Solar Energy System	(0.8)		(0.5)
Amortizable intangible assets, Net Carrying Amount	1.0		0.8
Developed Technology [Member]
Amortizable intangible assets, Weighted-Average Amortization Period	5	[1]
Amortizable intangible assets, Gross Carrying Amount	20.0	[1]	20.0	[1]
Amortizable intangible assets, Accumulated Amortization or Allocated to Solar Energy System	(2.7)	[1]	(1.3)	[1]
Amortizable intangible assets, Net Carrying Amount	17.3	[1]	18.7	[1]
Customer Sales Backlog [Member]
Amortizable intangible assets, Weighted-Average Amortization Period	1	[1]
Amortizable intangible assets, Gross Carrying Amount	0.4	[1]	0.4	[1]
Amortizable intangible assets, Accumulated Amortization or Allocated to Solar Energy System	(0.4)	[1]	(0.2)	[1]
Amortizable intangible assets, Net Carrying Amount			0.2	[1]
In-process Technology [Member]
Indefinite lived assets, Weighted Average Amortization Period	Indefinite	[1]
Indefinite lived assets, Gross Carrying Amount	0.3	[1]	0.3	[1]
Indefinite lived assets, Net Carrying Amount	0.3	[1]	0.3	[1]
Power Plant Development Arrangements [Member]
Indefinite lived assets, Weighted Average Amortization Period	Indefinite	[2]
Indefinite lived assets, Gross Carrying Amount	19.8	[2]	18.0	[2]
Indefinite lived assets, Accumulated Amortization or Allocated to Solar Energy System	(6.6)	[2]	(4.9)	[2]
Indefinite lived assets, Net Carrying Amount	$ 13.2	[2]	$ 13.1	[2]

[1] These intangibles represent the amounts acquired in the Solaicx acquisition, except there is a carrying amount of $7.1 million for SunEdison included within the customer relationships intangible. The useful life for in-process technology will be determined once the research and development process is complete and at that time amortization of the asset will begin.

[2] Power plant development arrangements are allocated to the solar energy system (fixed assets or inventory) upon completion of the related solar energy systems stemming from the backlog at the date of acquisition.

XML



Debt and Capital Lease Obligations (Debt) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2011	Dec. 31, 2010
Senior notes	$ 550.0
Long-term notes	22.3	24.0
Capital leases for equipment and other debt	79.9	2.9
Total long-term debt and capital leases	1,375.4	649.1
Less current portion - Long-term notes, capital leases for equipment and other debt	10.7	6.4
Long-term portion	1,334.7	610.6
Solar Energy [Member]
Solar energy systems, weighted average interest rate of 6.15% and 6.13%, respectively	29.0	33.6
Capital lease obligations	118.2	125.7
Finance obligations	605.0	496.5
Less current portion - Solar energy systems	$ 30.0	$ 32.1
Short-term debt, weighted average interest rate	6.15%	6.13%

XML



Earnings Per Share (Schedule of Calculation of Basic and Diluted (loss) Earnings Per Share) (Details) (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Earnings Per Share
Net income allocable to common stockholders, Basic	$ 47.3	$ 13.8	$ 42.8	$ 4.2
Net income allocable to common stockholders, Diluted	47.3	13.8	42.8	4.2
Total shares, Basic	229.8	226.8	229.4	226.8
Total shares, Diluted	230.9	228.0	231.0	227.9
Weighted-average shares outstanding, diluted	229.8	226.8	229.4	226.8
Weighted-average shares outstanding, basic	$ 229.8	$ 226.8	$ 229.4	$ 226.8
Stock options and restricted stock units	1.1	1.2	1.6	1.1
Earnings per share, Basic	$ 0.21	$ 0.06	$ 0.19	$ 0.02
Earnings per share, Diluted	$ 0.21	$ 0.06	$ 0.19	$ 0.02

XML



Stockholders' Equity (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended
	Feb. 01, 2011	Jun. 30, 2011	Jun. 30, 2011 Stock Compensation Plan [Member]	Jun. 30, 2010 Stock Compensation Plan [Member]	Jun. 30, 2011 Stock Compensation Plan [Member]	Jun. 30, 2010 Stock Compensation Plan [Member]	Jun. 30, 2011 Stock Options [Member]	Jun. 30, 2010 Stock Options [Member]	Jun. 30, 2011 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2010 Restricted Stock Units (RSUs) [Member]
Shares authorized for future grant under these plans			10,200,000		10,200,000
Weighted-average grant-date fair value per share of options granted							$ 6.30	$ 7.71
Weighted-average fair value of restricted stock units per share on the date of grant									$ 11.41	$ 15.65
Unrecognized compensation cost expected to be recognized over a weighted-average period (in years)							2.9		2.8
Total unrecognized compensation cost							$ 48.8		$ 31.9
Stock option vesting minimum period (in years)					three
Stock option vesting maximum period (in years)					10
Restricted stock units which were currently convertible into shares									0
Stock-based compensation expense, net of tax			7.1	11.6	13.2	18.4
Stock-based compensation expense, income tax benefit			$ 4.1	$ 6.4	$ 7.6	$ 10.2
Contingent consideration common stock issued	2,100,000	2,100,000

XML



Derivatives and Hedging Instruments

6 Months Ended

Jun. 30, 2011

Derivatives and Hedging Instruments

Derivatives and Hedging Instruments

(4) Derivatives and Hedging Instruments

MEMC's derivatives and hedging activities consist of:

		Assets (Liabilities or Equity) Fair Value
In millions	Balance Sheet Location	As of June  30, 2011			As of December 31, 2010
Derivatives designated as hedging:
Interest rate swaps	Accrued liabilities	$	(3.4	)	$	(6.2	)
Interest rate swaps	Prepaid and other current assets	$	0.6		$	0.7
Interest rate swaps	Accumulated other comprehensive income	$	0.8		$	2.4
Currency forward contracts	Accrued liabilities	$	—		$	(8.6	)
Currency forward contracts	Accumulated other comprehensive income	$	—		$	8.6
Derivatives not designated as hedging:
Suntech warrant	Other assets	$	4.9		$	5.2
Currency forward contracts	Prepaid and other current assets	$	14.3		$	2.1
Currency forward contracts	Accrued liabilities	$	(1.5	)	$	(0.5	)
Other derivatives	Prepaid and other current assets	$	—		$	1.2
Other derivatives	Other assets	$	1.8		$	1.6

		(Gains) Losses
		Three Months Ended June 30,						Six Months Ended June 30,
In millions	Statement of Operations Location	2011			2010			2011			2010
Derivatives designated as hedging:
Net investment hedge	Other, net	$	—		$	(16.9	)	$	—		$	(16.9	)
Derivatives not designated as hedging:
Suntech warrant	Decline in fair value of warrant	$	1.9		$	6.8		$	0.3		$	12.1
Currency forward contracts	Other, net	$	(12.0	)	$	(2.7	)	$	(10.2	)	$	(3.8	)

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. As of June 30, 2011 and December 31, 2010, these currency forward contracts had net notional amounts of $166.0 million and $78.7 million, respectively. 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.

In addition to the currency forward contracts purchased to hedge transactional currency risks, we have entered into currency forward contracts to hedge cash flow risks associated with future purchases of raw materials denominated in Euros. These forward contracts were established as cash flow hedges designed to protect against the variability in foreign currency rates between the Euro and U.S. Dollars. The cash flow hedges were accounted for using hedge accounting. The notional amount of the currency forward contracts designated and accounted for as cash flow hedges as of June 30, 2011 and December 31, 2010 was $317.4 million and $377.3 million, respectively. As of June 30, 2011, the future purchases of raw materials associated with these cash flow hedges were no longer deemed probable and accordingly, the related gains of $14.2 million on the forward contracts were reclassified from accumulated other comprehensive income into earnings. During the 2011 third quarter, these forward contracts were liquidated.

We are party to interest rate swap instruments with notional amounts totaling approximately $85.1 million and $146.2 million at June 30, 2011 and December 31, 2010, respectively, 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 financial institution counterparties to the agreements pay MEMC a floating interest rate. 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 settle on June 30, 2011 if the agreements were transferred to other third parties or cancelled by MEMC. The effective portion of these hedges during the three and six-months ended June 30, 2011 was recorded to accumulated other comprehensive income. Ineffectiveness of $0.5 million and $0.7 million was recognized in the three and six-months ended June 30, 2011, respectively, and no such amount was recognized in the respective periods in 2010.

The Suntech warrant consists of a fully vested, non-forfeitable warrant to purchase common shares of Suntech, a customer. The warrant was received in 2006 at the time that MEMC signed a long-term supply agreement with Suntech. The long-term supply agreement was terminated in the second quarter of 2011, but the termination had no impact on the warrant. The Suntech warrant exposes MEMC to equity price risk.

XML



Condensed Consolidating Financial Information (Narrative) (Details) (Senior Notes [Member], USD $)	6 Months Ended
	Jun. 30, 2011
Senior Notes [Member]
Senior Notes, Issuance date	March 10, 2011
Senior notes, issued amount	$ 550,000,000
Debt Instrument, Interest Rate, Stated Percentage	7.75%
Debt Instrument, Maturity Date	Apr. 01, 2019

XML



Restructuring and Impairment Charges (Details of Restructuring Expenses) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Restructuring charges	$ 13.6	$ 1.4	$ 13.8	$ 2.7
2009 U.S. Plan [Member]
Accrued, December 31, 2010			16.2
Restructuring charges	3.6		3.8
Cash Payments			(1.9)
Accrued, June 30, 2011	18.1		18.1
Cumulative Costs Incurred			25.2
Total Costs Expected to be Incurred			46.4
2009 U.S. Plan [Member] | Asset Move Costs [Member]
Restructuring charges			0.8
Cash Payments			(0.8)
Cumulative Costs Incurred			4.0
Total Costs Expected to be Incurred			20.3
2009 U.S. Plan [Member] | Severance and Other Employee Benefits [Member]
Accrued, December 31, 2010			16.2
Restructuring charges			0.1
Cash Payments			(1.1)
Accrued, June 30, 2011	15.2		15.2
Cumulative Costs Incurred			18.3
Total Costs Expected to be Incurred			19.2
2009 U.S. Plan [Member] | Contract Termination [Member]
Restructuring charges			2.9
Accrued, June 30, 2011	2.9		2.9
Cumulative Costs Incurred			2.9
Total Costs Expected to be Incurred			2.9
2009 U.S. Plan [Member] | Infrastructure Costs [Member]
Total Costs Expected to be Incurred			4.0
MEMC, Inc. [Member]
Restructuring charges	$ 6.5	$ 1.4	$ 6.7	$ 2.7

XML



Derivatives and Hedging Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Derivatives and Hedging Instruments

Derivatives and Hedging Activities

		Assets (Liabilities or Equity) Fair Value
In millions	Balance Sheet Location	As of June  30, 2011			As of December 31, 2010
Derivatives designated as hedging:
Interest rate swaps	Accrued liabilities	$	(3.4	)	$	(6.2	)
Interest rate swaps	Prepaid and other current assets	$	0.6		$	0.7
Interest rate swaps	Accumulated other comprehensive income	$	0.8		$	2.4
Currency forward contracts	Accrued liabilities	$	—		$	(8.6	)
Currency forward contracts	Accumulated other comprehensive income	$	—		$	8.6
Derivatives not designated as hedging:
Suntech warrant	Other assets	$	4.9		$	5.2
Currency forward contracts	Prepaid and other current assets	$	14.3		$	2.1
Currency forward contracts	Accrued liabilities	$	(1.5	)	$	(0.5	)
Other derivatives	Prepaid and other current assets	$	—		$	1.2
Other derivatives	Other assets	$	1.8		$	1.6

XML



Stockholders' Equity (Outstanding Stock Options) (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Stockholders' Equity
Outstanding at December 31,2010	13,259,245
Granted	4,233,683
Exercised	(10,033)
Forfeited	(84,142)
Expired	(31,359)
Outstanding at June 30, 2011	17,367,394
Stock Options Exercisable at June 30, 2011	5,831,677
Stock Options Outstanding at December 31,2010 Weighted Average Exercise Price	$ 21.88
Stock Options Granted, Weighted Average Exercise Price	$ 11.83
Stock Options Exercised, Weighted Average Exercise Price	$ 8.73
Stock Options Forfeited, Weighted Average Exercise Price	$ 12.53
Stock Options Expired, Weighted Average Exercise Price	$ 27.78
Stock Options Outstanding at June 30, 2011 Weighted Average Exercise Price	$ 19.48
Stock Options Exercisable at June 30, 2011 Weighted Average Exercise Price	$ 28.61
Outstanding at June 30, 2011, Aggregate Intrinsic Value	$ 0.25
Exercisable at June 30, 2011 Aggregate Intrinsic Value	$ 0.22
Outstanding at June 30, 2011, Weighted Average Remaining Contractual Life, years	8
Exercisable at June 30, 2011 Weighted Average Remaining Contractual Life	6

XML



Condensed Consolidating Financial Information (Schedule of Condensed Consolidating Balance Sheet) (USD $) In Millions						6 Months Ended	12 Months Ended			6 Months Ended	12 Months Ended			6 Months Ended	12 Months Ended
	Aug. 03, 2011	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Dec. 31, 2009	Jun. 30, 2011 MEMC, Inc. [Member]	Dec. 31, 2010 MEMC, Inc. [Member]	Jun. 30, 2010 MEMC, Inc. [Member]	Dec. 31, 2009 MEMC, Inc. [Member]	Jun. 30, 2011 Guarantor Subsidiaries [Member]	Dec. 31, 2010 Guarantor Subsidiaries [Member]	Jun. 30, 2010 Guarantor Subsidiaries [Member]	Dec. 31, 2009 Guarantor Subsidiaries [Member]	Jun. 30, 2011 Non-Guarantor Subsidiaries [Member]	Dec. 31, 2010 Non-Guarantor Subsidiaries [Member]	Jun. 30, 2010 Non-Guarantor Subsidiaries [Member]	Dec. 31, 2009 Non-Guarantor Subsidiaries [Member]	Jun. 30, 2011 Consolidating Adjustments [Member]	Dec. 31, 2010 Consolidating Adjustments [Member]
Cash and cash equivalents		$ 651.9	$ 707.3	$ 653.0	$ 632.7	$ 209.8	$ 15.5	$ 200.2	$ 105.9	$ 17.3	$ 7.2	$ 16.8	$ 49.7	$ 424.8	$ 684.6	$ 436.0	$ 477.1
Restricted cash		38.1	43.8				10.7			0.5	0.5			37.6	32.6
Accounts receivable, net		272.9	296.0			72.3	87.5			15.2	8.0			185.4	200.5
Inventories		335.4	214.6			44.5	33.3			107.7	59.0			274.5	163.2			(91.3)	(40.9)
Solar energy systems held for development and sale, including consolidated variable interest entities of $39.5 and $151.8 in 2011 and 2010, respectively		226.5	237.5							43.3	8.6			197.5	235.8			(14.3)	(6.9)
Income taxes receivable		25.6	35.6			19.2	16.7				17.4			6.4	1.5
Prepaid and other current assets		269.2	202.5			22.5	19.0			6.0	9.2			240.7	174.3
Total current assets		1,819.6	1,737.3			368.3	182.7			190.0	109.9			1,366.9	1,492.5			(105.6)	(47.8)
Investments		145.2	110.3			2.8	2.3			5.0	15.4			137.4	95.0				(2.4)
Investments in subsidiaries						1,878.5	1,758.8			1,018.1	911.5							(2,896.6)	(2,670.3)
Semiconductor and Solar Materials, net		1,677.5	1,465.9			83.2	78.5			325.3	328.7			1,298.6	1,083.4			(29.6)	(24.7)
Solar energy systems, net		740.0	567.6							49.2	4.2			590.0	511.9			100.8	51.5
Deferred tax assets, net		211.3	139.3			138.2	138.1			(27.7)	(27.7)			100.8	28.9
Restricted cash		20.0	18.7							0.2	0.2			19.8	18.5
Other assets		228.8	177.6			41.6	25.2			25.3	19.9			161.9	132.5
Goodwill		404.9	342.7							342.7	342.7			62.2
Intangible assets, net		50.1	52.5							46.9	52.5			3.2
Total assets		5,297.4	4,611.9			2,512.6	2,185.6			1,975.0	1,757.3			3,740.8	3,362.7			(2,931.0)
Current portion of long-term debt and capital lease obligations		10.7	6.4							2.0	2.8			8.7	3.6
Short-term solar energy system financing, current portion of solar energy system financing and capital lease obligations, including consolidated variable interest entities of $5.9 and $28.8 in 2011 and 2010, respectively		59.0	65.7							0.2	0.3			58.8	65.4
Accounts payable		608.4	745.5			19.8	20.9			81.2	115.9			507.4	608.7
Accrued liabilities		180.6	165.4			67.5	44.9			28.3	39.3			84.8	81.2
Contingent consideration related to acquisitions	(1.9)	51.0	106.4							46.0	106.4			5.0
Accrued wages and salaries		57.5	50.4			15.7	15.6			11.9	9.3			29.9	25.5
Short-term deposits on solar energy systems		27.8	8.8							5.8				22.0	8.8
Customer deposits		60.2	92.9			4.2	0.1			0.6	0.6			55.4	92.2
Intercompany (receivalbe) payable and short trem notes						(411.9)	(93.9)			414.6	131.9			(2.7)	(38.0)
Income taxes payable		80.2	42.6			(16.1)	11.0			(4.5)	(14.0)			100.8	45.6
Total current liabilities		1,135.4	1,284.1			(320.8)	(1.4)			586.1	392.5			870.1	893.0
Long-term debt and capital lease obligations, less current portion		641.5	20.5			550.0								91.5	20.5
Long-term solar energy system financing and capital lease obligations, less current portion, including consolidated variable interest entities of $86.8 and $107.2 in 2011 and 2010, respectively		693.2	590.1							1.9	3.9			691.3	586.2
Pension and post-employment liabilities		56.1	54.1			24.2	28.6							31.9	25.5
Deferred revenue for solar energy systems		112.7	75.0							1.0	0.7			111.7	74.3
Semiconductor and Solar Materials deferred revenue		52.7	115.2											52.7	115.2
Long-term intercompany note (receivalbe) payable						(163.1)	(125.2)			(24.6)	(23.6)			187.7	148.8
Other liabilities		179.4	177.3			44.5	31.9			5.5	2.8			129.4	142.6
Total liabilities		2,871.0	2,316.3			134.8	(66.1)			569.9	376.3			2,166.3	2,006.1
Preferred stock
Common stock		2.4	2.4
Additional paid-in capital		603.2	557.9
Retained earnings		2,156.3	2,113.5
Treasury stock		(458.9)	(456.2)
Accumulated other comprehensive income		74.8	34.1
Total MEMC stockholders' equity		2,377.8	2,251.7			2,377.8	2,251.7			1,405.1	1,381.0			1,525.9	1,312.7			(2,931.0)	(2,693.7)
Noncontrolling interests		48.6	43.9											48.6	43.9
Total stockholders' equity		2,426.4	2,295.6			2,377.8	2,251.7			1,405.1	1,381.0			1,574.5	1,356.6			(2,931.0)	(2,693.7)
Total liabilities and stockholders' equity		$ 5,297.4	$ 4,611.9			$ 2,512.6	$ 2,185.6			$ 1,975.0	$ 1,757.3			$ 3,740.8	$ 3,362.7			$ (2,931.0)	$ (2,693.7)

XML



Debt and Capital Lease Obligations (Principal Payments on Long-Term Debt) (Details) (USD $) In Millions	Jun. 30, 2011
Debt and Capital Lease Obligations
July 1, 2011 through December 31, 2011	$ 6.0
2012	46.4
2013	9.2
2014	9.4
2015	9.6
Thereafter	652.9
Total	$ 733.5

XML



Investments (Tables)

6 Months Ended

Jun. 30, 2011

Investments

Short-Term and Long-Term Investments

	As of		As of
In millions	June 30, 2011		December 31, 2010
Items measured at fair value on a recurring basis	$	35.4	$	41.1
Equity method investments		86.2		46.1
Time deposits		0.2		0.1
Equity investments at cost		23.6		23.1
Total investments		145.4		110.4
Less: short-term investments		0.2		0.1
Non-current investments	$	145.2	$	110.3

XML



Restructuring and Impairment Charges (Narrative) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Restructuring and impairment charges	$ 13.6	$ 1.4	$ 13.8	$ 2.7
2009 U.S. Plan [Member]
Restructuring activities, initiation date			Sep. 01, 2009
Restructuring and impairment charges	3.6		3.8
2009 U.S. Plan [Member] | Employee Benefits and Equipment Moving Costs [Member]
Restructuring and impairment charges		1.4		2.7
2009 U.S. Plan [Member] | Severance and Other Employee Benefits [Member]
Restructuring and impairment charges			0.1
2009 U.S. Plan [Member] | Contract Termination [Member]
Restructuring and impairment charges			2.9
2011 Global Plan [Member]
Restructuring activities, initiation date			Jun. 01, 2011
Restructuring and impairment charges	6.8
Assets impairment charges	3.2
MEMC, Inc. [Member]
Restructuring and impairment charges	$ 6.5	$ 1.4	$ 6.7	$ 2.7

XML



Earnings Per Share (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2011

Jun. 30, 2011

Earnings Per Share

Schedule of Calculation of Basic and Diluted (loss) Earnings Per Share

	Three Months Ended				Three Months Ended
	June 30, 2011				June 30, 2010
In millions, except per share amounts	Basic		Diluted		Basic		Diluted
EPS Numerator:
Net income allocable to common stockholders	$	47.3	$	47.3	$	13.8	$	13.8
EPS Denominator:
Weighted-average shares outstanding		229.8		229.8		226.8		226.8
Stock options and restricted stock units		—		1.1		—		1.2
Total shares		229.8		230.9		226.8		228.0
Earnings per share	$	0.21	$	0.21	$	0.06	$	0.06

	Six Months Ended				Six Months Ended
	June 30, 2011				June 30, 2010
In millions, except per share amounts	Basic		Diluted		Basic		Diluted
EPS Numerator:
Net income allocable to common stockholders	$	42.8	$	42.8	$	4.2	$	4.2
EPS Denominator:
Weighted-average shares outstanding		229.4		229.4		226.8		226.8
Stock options and restricted stock units		—		1.6		—		1.1
Total shares		229.4		231.0		226.8		227.9
Earnings per share	$	0.19	$	0.19	$	0.02	$	0.02

XML



Stockholders' Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity

Stockholders' Equity

(12) Stockholders' Equity

The following table presents the change in total stockholders' equity for the six months ended June 30, 2011:

In millions	MEMC Stockholders' Equity		Noncontrolling Interest			Total
Balance, January 1, 2011	$	2,251.7	$	43.9		$	2,295.6
Net income		42.8		14.3			57.1
Other comprehensive income, net of tax		40.7		4.3			45.0
Stock issued for SunEdison contingent consideration		24.5		—			24.5
Stock plans, net		18.1		—			18.1
Distributions to noncontrolling interest		—		(13.9	)		(13.9	)
Balance, June 30, 2011	$	2,377.8	$	48.6		$	2,426.4

On February 1, 2011 we issued 2.1 million shares to SunEdison's former unit holders as part of the contingent consideration pursuant to the terms of the acquisition agreement.

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. We issue new shares to satisfy stock option exercises. As of June 30, 2011, there were 10.2 million shares authorized for future grant under these plans. Options to employees are generally granted upon hire and annually or semi-annually, usually with four-year vesting, although certain grants have three, four or five-year cliff vesting. No option has a term of more than 10 years. Under our current equity plans, the exercise price of stock options granted equals the market price on the date of the grant.

The following table presents information regarding outstanding stock options as of June 30, 2011 and changes during the six months then ended with regard to stock options:

	Shares			Weighted- Average Exercise Price		Aggregate Intrinsic  Value (in millions)		Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2010		13,259,245		$	21.88
Granted		4,233,683			11.83
Exercised		(10,033	)		8.73
Forfeited		(84,142	)		12.53
Expired		(31,359	)		27.78
Outstanding at June 30, 2011		17,367,394		$	19.48	$	0.25		8
Options exercisable at June 30, 2011		5,831,677		$	28.61	$	0.22		6

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 2011 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 June 30, 2011. This amount changes based on the fair market value of our stock. For the six months ended June 30, 2011 and June 30, 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.

Our weighted-average assumptions are as follows:

	Six Months Ended			Six Months Ended
	June 30, 2011			June 30, 2010
Risk-free interest rate		1.7	%		2.2	%
Expected stock price volatility		65.7	%		67.5	%
Expected term until exercise (years)		5			4
Expected dividends		0.0	%		0.0	%

The weighted-average grant-date fair value per share of options granted was $6.30 and $7.71 for the six months ended June 30, 2011 and 2010, respectively. As of June 30, 2011, $48.8 million of total unrecognized compensation cost related to stock options granted and outstanding as of June 30, 2011 is expected to be recognized over a weighted-average period of 2.9 years.

Restricted stock units represent the right to receive a share of MEMC stock at a designated time in the future, provided the stock unit is vested at the time. The following table presents information regarding outstanding restricted stock units as of June 30, 2011 and changes during the six months then ended:

	Restricted Stock Units			Aggregate  Intrinsic Value (in millions)		Weighted Average Remaining Contractual Life
Outstanding at December 31, 2010		4,017,290
Granted		2,168,198
Converted		(658,604	)
Forfeited		(114,926	)
Outstanding at June 30, 2011		5,387,145		$	49.1		3

At June 30, 2011, there were no restricted stock units which were currently convertible into shares. The weighted-average fair value of restricted stock units per share on the date of grant was $11.41 and $15.65 for the six months ended June 30, 2011 and June 30, 2010, respectively. As of June 30, 2011, $31.9 million of total unrecognized compensation cost related to restricted stock units is expected to be recognized over a weighted-average period of 2.8 years.

Stock-based compensation expense for the three months ended June 30, 2011 and June 30, 2010 was $7.1 million and $11.6 million, net of income tax benefit of $4.1 million and $6.4 million, respectively. For the six months ended June 30, 2011 and June 30, 2010, stock-based compensation expense was $13.2 million and $18.4 million, net of income tax benefit of $7.6 million and $10.2 million, respectively.

XML



Investments (Short-Term and Long-Term Investments) (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Items measured at fair value on a recurring basis	$ 35.4	$ 41.1
Equity method investments	86.2	46.1
Time deposits	0.2	0.1
Equity investments at cost	23.6	23.1
Total investments	145.4	110.4
Less: short-term investments	0.2	0.1
Non-current investments	145.2	110.3
MEMC, Inc. [Member]
Non-current investments	$ 2.8	$ 2.3

XML



Reportable Segments (Narrative) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended					6 Months Ended		3 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010	Jun. 30, 2011 MEMC, Inc. [Member]	Jun. 30, 2010 MEMC, Inc. [Member]	Jun. 30, 2011 MEMC, Inc. [Member]	Jun. 30, 2010 MEMC, Inc. [Member]	Jun. 30, 2011 Semiconductor Materials [Member]	Mar. 31, 2011 Semiconductor Materials [Member]	Jun. 30, 2010 Semiconductor Materials [Member]	Jun. 30, 2011 Solar Materials [Member]	Jun. 30, 2010 Solar Materials [Member]	Jun. 30, 2011 Solar Materials [Member]	Jun. 30, 2010 Solar Materials [Member]	Jun. 30, 2011 Solar Energy [Member]	Mar. 31, 2011 Corporate and Other [Member]
Equity in earnings of joint venture, net of tax	$ 2.0		$ 3.3	$ 7.3		$ (0.1)		$ (0.1)	$ (1.5)						$ 3.3	$ 7.3
Goodwill	404.9		404.9		342.7								56.4		56.4		348.5
Net insurance proceeds from our business interruption lost profits claim related to the disruption		11.9		11.9								8.0		3.9	0
Revenue recognition	149.4		149.4
Cost of goods sold, purchase obligations	52.4		52.4										52.4
Restructuring and impairment charges	13.6	1.4	13.8	2.7		6.5	1.4	6.7	2.7	8.1	0.2		1.3				4.2
Legal expenses																		$ 13.1

XML



Debt and Capital Lease Obligations (Redemption Prices) (Details)	Jun. 30, 2011
Debt and Capital Lease Obligations
2014	105.813%
2015	103.875%
2016	101.938%
2017 and thereafter	100.00%

XML



Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2011

Comprehensive Income (Loss)

Comprehensive Income (Loss)

(5) Comprehensive Income (Loss)

Comprehensive income (loss) consists of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
In millions	2011			2010			2011			2010
Net income	$	47.8		$	15.4		$	57.1		$	6.3
Other comprehensive (loss) income, net of tax:
Net translation adjustment		17.4			(40.1	)		40.6			(50.6	)
Net unrealized loss on available-for-sale securities		(10.2	)		(15.3	)		(5.6	)		(5.8	)
Hedging instruments		(12.7	)		(4.9	)		10.2			(4.2	)
Net actuarial loss, prior service credit, and transition obligation		—			—			(0.2	)		—
Other comprehensive (loss) income, net of tax		(5.5	)		(60.3	)		45.0			(60.6	)
Total comprehensive income (loss)		42.3			(44.9	)		102.1			(54.3	)
Net income attributable to noncontrolling interests		(0.5	)		(1.6	)		(14.3	)		(2.1	)
Net translation adjustment attributable to noncontrolling interests		(3.1	)		2.9			(4.3	)		1.8
Comprehensive income (loss) attributable to MEMC stockholders	$	38.7		$	(43.6	)	$	83.5		$	(54.6	)

XML



Deferred Revenue and Profit

6 Months Ended

Jun. 30, 2011

Deferred Revenue and Profit

Deferred Revenue and Profit

(15) Deferred Revenue and Profit

Deferred revenue and profit consists of the following:

In millions	As of June 30, 2011		As of December 31, 2010
Deferred revenue and profit for solar energy systems:
Short-term deposits on solar energy systems	$	27.8	$	8.8
Profit deferrals on solar energy system sales		99.4		63.2
Deferred subsidy revenue		13.3		11.8
Total solar energy system deferred revenue	$	140.5	$	83.8
Semiconductor and Solar Materials deferred revenue:
Short-term deferred revenue		27.0		—
Long-term deferred revenue		52.7		115.2
Total Semiconductor and Solar Materials deferred revenue	$	79.7	$	115.2
Total deferred revenue	$	220.2	$	199.0

On June 30, 2011, we resolved our long-term solar wafer supply agreement with Suntech Power Holdings Co., Ltd. ("Suntech"). Under the terms of the supply agreement, which was originally signed in July 2006, MEMC was to supply solar wafers to Suntech over a 10-year period, with pre-determined pricing, on a take-or-pay basis beginning in January 2007. As part of the original supply agreement, Suntech advanced funds to MEMC in the form of a security deposit. As part of a separate agreement, MEMC also received a warrant to purchase up to a 4.99% equity stake in Suntech. Suntech has agreed to fulfill its contractual take-or-pay commitment to MEMC for $120.0 million for product delivered and to be delivered by MEMC. The consideration was comprised of the retention by MEMC of $53.0 million of cash previously deposited by Suntech under the supply agreement and currently held by MEMC, and a commitment to pay $67.0 million in four equal installments in July 2011, October 2011, January 2012, and April 2012. MEMC received the first payment in July 2011 and the collectability on the remaining balance is considered reasonably assured. Suntech has also committed to establish an irrevocable letter of credit for the benefit of MEMC for the remaining three payments. The letter of credit is to have no drawing conditions other than the passage of time. MEMC has retained the Suntech warrant originally issued to MEMC in July 2006, which had a related unamortized balance recorded in deferred revenues of $56.4 million prior to the resolution of the long-term solar wafer supply agreement. These three components totaled $176.4 million, of which $149.4 million was recorded to revenue during the second quarter of 2011 and $27.0 million was deferred. The deferred revenue will be recognized as revenue as we complete our remaining performance commitments scheduled to be completed by December 31, 2011. The retention of the deposit in satisfaction of the take or pay requirement has been classified as an operating cash inflow in the statement of cash flows.

XML



Stockholders' Equity (Changes in Stockholders Equity) (Details) (USD $) In Millions	0 Months Ended	3 Months Ended		6 Months Ended
	Feb. 01, 2011	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Mar. 31, 2011	Dec. 31, 2010
Balance		$ 2,426.4		$ 2,426.4			$ 2,295.6
Net income		47.8	15.4	57.1	6.3
Other comprehensive income, net of tax		(5.5)	(60.3)	45.0	(60.6)
Stock issued for SunEdison contingent consideration		26.0		26.0		5.0	80.2
Stock plans, net				18.1
Distributions to noncontrolling interest				(13.9)
Contingent consideration common stock issued	2.1			2.1
Stock [Member]
Stock issued for SunEdison contingent consideration		24.5		24.5
Stock [Member] | MEMC Stockholders' Equity [Member]
Stock issued for SunEdison contingent consideration		24.5		24.5
MEMC, Inc. [Member]
Balance		2,377.8		2,377.8			2,251.7
Net income		47.3	13.8	42.8	4.2
MEMC Stockholders' Equity [Member]
Balance		2,377.8		2,377.8			2,251.7
Net income				42.8
Other comprehensive income, net of tax				40.7
Stock plans, net				18.1
Noncontrolling Interest [Member]
Balance		48.6		48.6			43.9
Net income				14.3
Other comprehensive income, net of tax				4.3
Distributions to noncontrolling interest				$ (13.9)

XML



Debt and Capital Lease Obligations (Aggregate Amounts of Minimum Lease Payments) (Details) (USD $) In Millions	Jun. 30, 2011
Debt and Capital Lease Obligations
July 1, 2011 through December 31, 2011	$ 21.9
2012	28.8
2013	27.5
2014	25.7
2015	$ 23.9

XML



Reportable Segments (Tables)

6 Months Ended

Jun. 30, 2011

Reportable Segments

Schedule of Reportable Segments

	Three Months Ended June  30,						Six Months Ended June 30,
In millions	2011			2010			2011			2010
Net sales:
Semiconductor Materials	$	275.3		$	249.6		$	526.8		$	468.9
Solar Materials		323.1			168.0			649.4			325.7
Solar Energy		147.2			30.7			305.3			91.4
Consolidated net sales	$	745.6		$	448.3		$	1,481.5		$	886.0
Operating income (loss):
Semiconductor Materials	$	3.4		$	24.3		$	11.8		$	16.4
Solar Materials		89.2			19.1			128.6			31.3
Solar Energy		(8.4	)		(4.4	)		(15.0	)		2.4
Corporate and other		(32.5	)		(35.7	)		(73.9	)		(62.1	)
Consolidated operating income (loss)	$	51.7		$	3.3		$	51.5		$	(12.0	)
Interest expense (income):
Semiconductor Materials	$	(0.5	)	$	0.2		$	(0.7	)	$	0.3
Solar Materials		1.8			—			1.1			0.1
Solar Energy		7.1			4.9			12.2			16.0
Corporate and other		12.8			0.9			17.6			1.7
Consolidated net interest expense	$	21.2		$	6.0		$	30.2		$	18.1
Depreciation and amortization:
Semiconductor Materials	$	31.0		$	26.2		$	61.6		$	52.5
Solar Materials		17.3			7.3			29.7			14.2
Solar Energy		7.3			5.1			13.3			9.4
Consolidated depreciation and amortization	$	55.6		$	38.6		$	104.6		$	76.1
Capital expenditures:
Semiconductor Materials	$	34.0		$	31.6		$	84.7		$	50.5
Solar Materials		65.2			62.9			219.5			90.2
Solar Energy(1)		175.3			67.1			228.3			112.0
Corporate and other		2.3			0.1			2.3			0.1
Consolidated capital expenditures	$	276.8		$	161.7		$	534.8		$	252.8

XML



Variable Interest Entities (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Variable Interest Entities
Current assets	$ 43.9	$ 173.0
Noncurrent assets	62.9	63.1
Total assets	106.8	236.1
Current liabilities	9.8	38.5
Noncurrent liabilities	87.3	107.8
Total liabilities	$ 97.1	$ 146.3

XML



Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2011

Comprehensive Income (Loss)

Schedule of Comprehensive Income (Loss)

	Three Months Ended June 30,						Six Months Ended June 30,
In millions	2011			2010			2011			2010
Net income	$	47.8		$	15.4		$	57.1		$	6.3
Other comprehensive (loss) income, net of tax:
Net translation adjustment		17.4			(40.1	)		40.6			(50.6	)
Net unrealized loss on available-for-sale securities		(10.2	)		(15.3	)		(5.6	)		(5.8	)
Hedging instruments		(12.7	)		(4.9	)		10.2			(4.2	)
Net actuarial loss, prior service credit, and transition obligation		—			—			(0.2	)		—
Other comprehensive (loss) income, net of tax		(5.5	)		(60.3	)		45.0			(60.6	)
Total comprehensive income (loss)		42.3			(44.9	)		102.1			(54.3	)
Net income attributable to noncontrolling interests		(0.5	)		(1.6	)		(14.3	)		(2.1	)
Net translation adjustment attributable to noncontrolling interests		(3.1	)		2.9			(4.3	)		1.8
Comprehensive income (loss) attributable to MEMC stockholders	$	38.7		$	(43.6	)	$	83.5		$	(54.6	)

XML



Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Per Share data	Jun. 30, 2011	Dec. 31, 2010
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts	$ 7.8	$ 7.8
Solar energy systems held for development and sale, variable interest entities	39.5	151.8
Semiconductor and Solar Materials, accumulated depreciation	764.5	694.6
Solar energy systems, variable interest entities	58.6	56.2
Solar energy systems, accumulated depreciation	23.2	14.3
Short-term solar energy system financing and capital lease obligations, variable interest entities	5.9	28.8
Long-term solar energy system financing and capital lease obligations, variable interest entities	$ 86.8	$ 107.2
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	50.0	50.0
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300.0	300.0
Common stock, shares issued	240.6	237.9
Treasury stock, shares	10.3	10.0

XML



Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

Commitments and Contingencies

(16) Commitments and Contingencies

Purchase Obligations

We maintain long-term agreements with multiple suppliers in connection with the purchase of certain raw materials and long-term agreements with multiple subcontractors to manufacture solar wafers for us. We have provided refundable deposits to these suppliers of $55.8 million and $88.7 million as of June 30, 2011 and December 31, 2010, respectively. These deposits are refundable to the extent we fulfill our minimum take-or-pay requirements.

During the quarter ended June 30, 2011, a $52.4 million charge was recorded to cost of goods sold related to the estimated probable shortfall to our purchase obligations associated with certain take-or-pay agreements we have with suppliers for raw materials. It is possible that there may be additional losses in the future which could be material; however, such amounts are not reasonably estimable at this time. In addition, we have also entered into foreign currency forwards to hedge against the fluctuation of foreign currencies related to these future purchases. Because it is no longer probable that we will execute these foreign currency denominated transactions, the contracts are no longer considered cash flow hedges for accounting purposes. Accordingly, we have recorded a gain on hedges of $14.2 million to other income during the quarter ended June 30, 2011.

Contingent Consideration

Contingent consideration was due to the former SunEdison unit holders if certain operational criteria were met from January 1, 2010 through December 31, 2010. As of December 31, 2010, we recorded $80.2 million of contingent consideration, which was the maximum payout under the acquisition agreement. This liability was paid on February 1, 2011 through a combination of $55.7 million in cash and the issuance of 2.1 million shares of MEMC common stock.

Contingent consideration may also be due to the former Solaicx shareholders if certain operational criteria are met from July 1, 2010 through December 31, 2011. The amount payable is based on Solaicx achieving revenues of at least $60.0 million during such time period, up to a maximum revenue target of $71.8 million, with the payout on a linear basis between those two amounts. This would entitle the former Solaicx shareholders to up to an additional $27.6 million of a combination of cash and MEMC common stock with the number of shares fixed at the date of the acquisition agreement. As of June 30, 2011, the range of outcomes and the assumptions used to develop the estimates has changed since the date of the acquisition. During the three months ended June 30, 2011, due to a decline in MEMC's stock price, the liability was reduced by $7.0 million to the current balance of $19.9 million based on the estimated fair value of the contingent consideration as of June 30, 2011. Future revisions to the estimated fair value of the contingent consideration could be material to the statement of operations.

Contingent consideration was recorded in connection with two entities acquired by SunEdison during 2011. The amount payable in cash is based on the entity achieving specific milestones in the development, installation, and interconnection of solar energy systems. As of June 30, 2011, the amount payable was $31.1 million. Future revisions to the estimated fair value of the contingent consideration could be material.

Commitments

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 June 30, 2011.

We generally warrant the operation of our solar energy systems for a period of time. Certain parts and labor warranties from our vendors can be assigned to our customers. 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 June 30, 2011. We may also indemnify our customers for tax credits associated with the systems we construct and sell and then leaseback. During the six months ended June 30, 2011, we made additional payments under the terms of the lease agreements to indemnify our sale leaseback customers for approximately $6.7 million for shortfalls in amounts approved by the U.S. Treasury Department related to the Grant in Lieu program tax credits. We are working with our sale leaseback customers and the U.S. Treasury Department to recover these shortfalls. We believe additional exposures to such payments are not probable and/or estimable as of June 30, 2011.

In connection with certain contracts to sell outright solar energy systems or as sale leasebacks, SunEdison has guaranteed the systems' performance for various time periods following the date of interconnection. Also, under a separate operations and maintenance services agreement, SunEdison guaranteed the uptime availability of the system over the term of the arrangement, which may last 20 years. To the extent there are shortfalls in either of the guarantees, SunEdison is required to indemnify the purchaser up to the guaranteed amount through a cash payment. The maximum losses that SunEdison may be subject to for non-performance are contractually limited by the terms of each executed agreement.

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.

S.O.I.TEC Silicon on Insulator Technologies S.A. v. MEMC Electronic Materials, Inc.

On May 19, 2008, Soitec and Commissariat A L'Energie 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. Soitec and CEA filed an amended complaint on July 21, 2009, adding a fourth, related patent to the lawsuit. MEMC filed a counterclaim against Soitec for infringement of one of MEMC's U.S. patents. The Court bifurcated the case into two phases, a first liability phase, which, to the extent liability is found, will be followed by a second damages phase. In a memorandum opinion dated October 13, 2010, the Court found that all of MEMC's current products and processes do not infringe any valid claim of the four asserted Soitec patents.

The Court held a jury trial from October 25, 2010 to November 2, 2010. After the Court's October 13, 2010 ruling in favor of MEMC, the only remaining claim that Soitec continued to assert at trial was a single patent claim directed against some mono-implant research and development efforts conducted by MEMC approximately four to six years ago, none of which have occurred since 2006, and none of which are material or relevant to the current operations at MEMC. MEMC continued to assert at trial its counterclaim for infringement of MEMC's patent. On November 2, 2010, the jury found that certain of Soitec's wafers infringed the patent asserted by MEMC at trial. The jury also found that one of the Soitec patent claims was valid. This single patent claim covers MEMC's mono-implant research and development efforts that ended in 2006. On July 13, 2011, the court denied all post trial motions. MEMC expects to appeal certain of the Court's rulings in this matter. The damages phase of this trial will likely occur after any appeals by MEMC or Soitec in the case. We believe that Soitec and CEA's suit against us has no merit, and we are asserting a vigorous defense against these claims, as well as our infringement counterclaim. Although it is not possible to predict the outcome of such matters, we believe that the ultimate outcome of this proceeding will not have a material adverse effect on our financial position, cash flows or results of operations.

Semi-Materials Co., Ltd. v. MEMC Electronic Materials, Inc. and MEMC Pasadena, Inc.

On September 28, 2006, Semi-Materials Co., Ltd. ("Semi-Materials") filed a complaint against MEMC in the U.S. District Court for the Eastern District of Missouri (Case No. 4:06-CV-01426-FRB) alleging breach of contract, unjust enrichment, fraud, and conversion, and seeking specific performance, all related to a series of purchase orders for chunk polysilicon and polysilicon solar ingot. This litigation resulted in a trial which commenced on February 22, 2011. On March 2, 2011, the jury found for MEMC on the fraud and unjust enrichment claims made by Semi-Materials against the Company. The jury found for Semi-Materials on the breach of contract claim, awarding damages to Semi-Materials of $19.0 million. Approximately $5.1 million of this amount relates to an amount previously recorded by MEMC. MEMC believes that the jury award was calculated not based on the actual harm suffered by Semi-Materials for the alleged failed deliveries, but based on the difference between the price under the alleged 2005 purchase orders and the price of polysilicon in November 2006 (after polysilicon prices had risen substantially throughout 2006). MEMC has filed a post-trial motion for judgment as a matter of law attacking the verdict on various bases including the damage amount awarded (as MEMC believes the damages do not accurately measure any damages suffered by Semi-Materials and results in a windfall to Semi-Materials). Semi-Materials has filed a post-trial motion seeking prejudgment interest. Both post-trial motions are fully briefed and the Court is expected to rule on the motions in the coming weeks. MEMC intends to appeal the case to the Eighth Circuit. The appellate deadlines will be determined based upon the Court's disposition of the parties' post-trial motions. During the first quarter of 2011, MEMC recorded $13.9 million to marketing and administration expenses as a result of the jury verdict pending the appeal.

On March 31, 2008, Semi-Materials and its affiliate SMC Shanghai ("SMC") filed two additional lawsuits against MEMC, one in the United States District Court for the Southern District of Texas (Case No. 4:08-CV-00991) (the "Texas Action") and another in the United States District Court for the Eastern District of Missouri (Case No. 4:08-CV-00434-JCH) (the "Missouri Action"). In both cases, Semi-Materials and SMC alleged that: (i) MEMC Pasadena, Inc. ("MEMC Pasadena") breached an agreement with SMC for SMC to act as MEMC's exclusive sales agent in China; (ii) MEMC Pasadena breached an agreement with Semi-Materials for Semi-Materials to act as MEMC Pasadena's exclusive sales agent in Korea; (iii) MEMC tortiously interfered with the purported sales agency agreements among MEMC Pasadena and SMC and Semi-Materials; and (iv) MEMC tortiously interfered with a separate sales agency agreement Semi-Materials claimed existed with an unrelated party. In the Missouri Action, Semi-Materials also claimed that MEMC tortiously interfered with an expectancy for an on-going business relationship Semi-Materials claimed existed with the un-related party. Upon MEMC's motions for summary judgment in the Missouri Action, the Court dismissed the claim that MEMC tortiously interfered with the purported sales agency agreements, and a claim that MEMC tortiously interfered with an alleged sales agency agreement between Semi-Materials and the unrelated party. The remaining claims were tried before a jury between January 4 and January 12, 2010. At trial, the jury found in favor of Semi-Materials and SMC on their respective claims for breach of contract against MEMC Pasadena, awarding a verdict of $0.2 million, and found in favor of MEMC on Semi-Materials' claim for tortious interference with an expectancy of an ongoing business relationship with the unrelated party. MEMC Pasadena filed a post-trial motion for judgment as a matter of law as to the breach of contract claims on which the jury found in favor of Semi-Materials and SMC, which the Court denied. Semi-Materials and SMC filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit concerning rulings the Court made at summary judgment concerning the plaintiffs' alleged damages on their breach of contract claims. MEMC Pasadena filed a notice of cross-appeal concerning the Court's entry of judgment based upon the jury verdict and the Court's denial of MEMC's motion for judgment as a matter of law. The oral argument in this appeal occurred on April 11, 2011. No discovery has been undertaken in the Texas Action, and it has been stayed.

We do not believe that the Semi-Materials cases, in whole or in part, will have a material adverse effect on us. Due to uncertainty regarding the litigation process, the outcome of these matters are unpredictable, damages could be substantial, and the results of these cases could be unfavorable for MEMC.

Minneapolis Firefighters' Relief Association v. MEMC Electronic Materials, Inc., et al.

On September 26, 2008, a putative class action lawsuit was filed in the U.S. District Court for the Eastern District of Missouri by plaintiff Minneapolis Firefighters' Relief Association asserting claims against MEMC and Nabeel Gareeb, MEMC's former Chief Executive Officer. On October 10, 2008, a substantially similar putative class action lawsuit was filed by plaintiff Donald Jameson against MEMC, Mr. Gareeb and Ken Hannah, MEMC's former Chief Financial Officer and currently MEMC's Executive Vice President and President—Solar Materials. These cases purportedly were brought on behalf of all persons who acquired shares of MEMC's common stock between June 13, 2008 and July 23, 2008, inclusive (the "Class Period"). Both complaints alleged that, during the Class Period, MEMC failed to disclose certain material facts regarding MEMC's operations and performance, which had the effect of artificially inflating MEMC's stock price in violation of Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"). Plaintiffs further alleged that Messrs. Gareeb and Hannah are subject to liability under Section 20(a) of the Act as control persons of MEMC. Plaintiffs sought certification of the putative class, unspecified compensatory damages, interest and costs, as well as ancillary relief. On December 12, 2008, these actions were consolidated, and the Court appointed Mahendra A. Patel as lead plaintiff. Plaintiff filed a consolidated amended complaint on February 23, 2009. Defendants filed a motion to dismiss the consolidated amended complaint, which was fully briefed by the parties by June 24, 2009. On March 8, 2010, the Court dismissed the consolidated class action complaint with prejudice. On March 31, 2010, plaintiff filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit. Oral argument for this appeal occurred on April 12, 2011. On June 17, 2011, the United States Court of Appeals for the Eighth Circuit affirmed the dismissal with prejudice.

Brian Larkowski v. John Marren, et al.

On November 4, 2008, Brian Larkowski, a purported shareholder of MEMC, filed a derivative action in the Circuit Court of St. Charles County, Missouri against defendants John Marren, Peter Blackmore, Nabeel Gareeb, Marshall Turner, Robert J. Boehlke, C. Douglas Marsh, William E. Stevens, James B. Williams and Michael McNamara (collectively "individual defendants") and MEMC as a nominal defendant.

Each individual defendant is a current or former officer and/or director of MEMC. The lawsuit alleges breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment, based on allegations of conduct similar to that alleged in the putative class action lawsuit described above. On December 19, 2008, the court entered a stipulated order staying the derivative action pending resolution of any motions to dismiss in the putative class action described above. On June 16, 2011, the Court continued the stay. On July 22, 2011, the plaintiff voluntarily dismissed the action without prejudice.

Jerry Jones v. MEMC Electronic Materials, Inc., et al.

On December 26, 2008, a putative class action lawsuit was filed in the U.S. District Court for the Eastern District of Missouri by plaintiff, Jerry Jones, purportedly on behalf of all participants in and beneficiaries of MEMC's 401(k) Savings Plan (the "Plan") between September 4, 2007 and December 26, 2008, inclusive. The complaint asserted claims against MEMC and certain of its directors, employees and/or other unnamed fiduciaries of the Plan. The complaint alleges that the defendants breached certain fiduciary duties owed under the Employee Retirement Income Security Act ("ERISA"), generally asserting that the defendants failed to make full disclosure to the Plan's participants of the risks of investing in MEMC's stock and that the Company's stock should not have been made available as an investment alternative in the Plan. The misstatements alleged in the complaint significantly overlap with the misstatements alleged in the federal securities class action described above.

On June 1, 2009, an amended class action complaint was filed by Mr. Jones and another purported participant of the Plan, Manuel Acosta, which raises substantially the same claims and is based on substantially the same allegations as the original complaint. However, the amended complaint changes the period of time covered by the action, purporting to be brought on behalf of beneficiaries of and/or participants in the Plan from June 13, 2008 through the present, inclusive (the "Class Period"). The amended complaint seeks unspecified monetary damages, including losses the participants and beneficiaries of the Plan allegedly experienced due to their investment through the Plan in MEMC's stock, equitable relief and an award of attorney's fees. No class has been certified and discovery has not begun. The Company and the named directors and employees filed a motion to dismiss the complaint, which was fully briefed by the parties as of October 9, 2009. The parties each subsequently filed notices of supplemental authority and corresponding responses. On March 17, 2010, the court denied the motion to dismiss. The MEMC defendants filed a motion for reconsideration or, in the alternative, certification for interlocutory appeal, which was fully briefed by the parties as of June 16, 2010. The parties each subsequently filed notices of supplemental authority and corresponding responses. On October 18, 2010, the court granted the MEMC defendants' motion for reconsideration, vacated its order denying the MEMC defendants' motion to dismiss, and stated that it will revisit the issues raised in the motion to dismiss after the parties supplement their arguments relating thereto. Both parties filed briefs supplementing their arguments on November 1, 2010, and the parties each subsequently filed additional notices of supplemental authority. On June 28, 2011, plaintiff Jerry Jones filed a notice of voluntary withdrawal from the action. On June 29, 2011, the Court entered an order withdrawing Jones as one of the plaintiffs in this action.

MEMC believes the above remaining ERISA class action is without merit and we will assert a vigorous defense. Due to the inherent uncertainties of litigation, we cannot predict the ultimate outcome or resolution of the foregoing class action proceedings or estimate the amounts of, or potential range of, loss with respect to these proceedings. An unfavorable outcome could have a material adverse impact on our business, results of operations and financial condition. We have indemnification agreements with each of our present and former directors and officers, under which we are generally required to indemnify each such director or officer against expenses, including attorney's fees, judgments, fines and settlements, arising from actions such as the lawsuits described above (subject to certain exceptions, as described in the indemnification agreements).

From time to time we may conclude it is in the best interests of our stockholders, employees, vendors and customers to settle one or more litigation matters, and any such settlement could include substantial payments; however, other than as may be noted above, we have not reached this conclusion with respect to any particular matter at this time. There are a variety of factors that influence our decision to settle any particular individual matter, and the amount we may choose to pay or accept as payment to settle such matters, including the strength of our case, developments in the litigation (both expected and unexpected), the behavior of other interested parties, including non-parties to the matter, the demand on management time and the possible distraction of our employees associated with the case and/or the possibility that we may be subject to an injunction or other equitable remedy. It is difficult to predict whether a settlement is possible, the amount of an appropriate settlement or when is the opportune time to settle a matter in light of the numerous factors that go into the settlement decision.

XML



Fair Value Measurements (Financial Instruments Measured at Fair Value on Recurring Basis) (Details) (Fair Value Measurements, Recurring [Member], USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Fair Value Assets (Liabilities), Total	$ 1.1	$ (69.8)
Available for Sale Investments [Member]
Fair Value Assets (Liabilities), Total	35.4	41.1
Available for Sale Investments [Member] | Level 2 [Member]
Fair Value Assets (Liabilities), Total	35.4	41.1
Suntech Warrant [Member]
Fair Value Assets (Liabilities), Total	4.9	5.2
Suntech Warrant [Member] | Level 3 [Member]
Fair Value Assets (Liabilities), Total	4.9	5.2
Interest Rate Swaps and Option Thereon [Member]
Fair Value Assets (Liabilities), Total	(2.8)	(4.3)
Interest Rate Swaps and Option Thereon [Member] | Level 2 [Member]
Fair Value Assets (Liabilities), Total	(2.8)	(4.3)
Currency Forward Contracts [Member]
Fair Value Assets (Liabilities), Total	12.8	(7.0)
Currency Forward Contracts [Member] | Level 1 [Member]
Fair Value Assets (Liabilities), Total	12.8	(7.0)
Other Derivatives [Member]
Fair Value Assets (Liabilities), Total	1.8	1.6
Other Derivatives [Member] | Level 3 [Member]
Fair Value Assets (Liabilities), Total	1.8	1.6
Contingent Consideration Related to Acquisitions [Member]
Fair Value Assets (Liabilities), Total	51.0	106.4
Contingent Consideration Related to Acquisitions [Member] | Level 1 [Member]
Fair Value Assets (Liabilities), Total		80.2
Contingent Consideration Related to Acquisitions [Member] | Level 3 [Member]
Fair Value Assets (Liabilities), Total	51.0	26.2
Level 1 [Member]
Fair Value Assets (Liabilities), Total	12.8	(87.2)
Level 2 [Member]
Fair Value Assets (Liabilities), Total	32.6	36.8
Level 3 [Member]
Fair Value Assets (Liabilities), Total	$ (44.3)	$ (19.4)

XML



Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2011

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

(18) Unaudited Condensed Consolidating Financial Information

On March 10, 2011, we issued $550.0 million of 7.75% Senior Notes due April 1, 2019 (the "Original Notes"). The Original Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). In connection with the sale of the Original Notes, the Company entered into a Registration Rights Agreement with the initial purchasers of the Original Notes party thereto, pursuant to which the Company and the Subsidiary Guarantors (as defined below) agreed to file a registration statement with respect to an offer to exchange the Original Notes for a new issue of substantially identical notes registered under the Securities Act (the "Exchange Notes" and together with the Original Notes, the "Notes"). The Original Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain wholly-owned domestic subsidiaries of the Company (the "Subsidiary Guarantors").

The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(d) of Regulation S-X promulgated under the Securities Act, presents the unaudited condensed consolidating financial information separately for:

i. The Company, as the issuer of the 2019 Notes;

ii. The Subsidiary Guarantors, on a combined basis;

iii. The Company's other subsidiaries, on a combined basis, which are not guarantors of the 2019 Notes (the "Subsidiary Non-Guarantors");

iv. Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Company, the Subsidiary Guarantors and the Subsidiary Non-Guarantors, (b) eliminate the investments in the Company's subsidiaries and (c) record consolidating entries; and

v. The Company and its subsidiaries on a consolidated basis.

Unaudited Condensed Consolidating Statement of Operations

For the three months ended June 30, 2011

(In millions, except per share data)

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	232.1		$	111.4		$	1,057.5		$	(655.4	)	$	745.6
Cost of goods sold		236.2			99.2			876.9			(647.8	)		564.5
Gross margin		(4.1	)		12.2			180.6			(7.6	)		181.1
Operating expenses:
Marketing and administration		37.1			20.5			36.4			—			94.0
Research and development		15.6			2.1			4.1			—			21.8
Restructuring and impairment charges		6.5			0.4			6.7			—			13.6
Operating (loss) income		(63.3	)		(10.8	)		133.4			(7.6	)		51.7
Non-operating (income) expense:
Interest expense		11.1			0.2			9.5			0.4			21.2
Interest income		(0.1	)		(0.2	)		(0.2	)		(0.4	)		(0.9	)
Decline in fair value of warrant		—			—			1.9			—			1.9
Other, net		(12.3	)		(2.1	)		(7.3	)		4.5			(17.2	)
Total non-operating (income) expense		(1.3	)		(2.1	)		3.9			4.5			5.0
(Loss) income before income tax (benefit) expense, equity in (loss) earnings of joint venture and investment in subsidiary earnings		(62.0	)		(8.7	)		129.5			(12.1	)		46.7
Income tax (benefit) expense		(30.5	)		13.2			19.5			(1.3	)		0.9
(Loss) income before equity in (loss) earnings of joint venture and investment in subsidiary earnings		(31.5	)		(21.9	)		110.0			(10.8	)		45.8
Investment in subsidiary earnings		78.9			95.2			—			(174.1	)		—
Equity in (loss) earnings of joint venture, net of tax		(0.1	)		—			2.1			—			2.0
Net income		47.3			73.3			112.1			(184.9	)		47.8
Net loss (income) attributable to noncontrolling interests		—			0.1			(0.6	)		—			(0.5	)
Net income attributable to MEMC stockholders	$	47.3		$	73.4		$	111.5		$	(184.9	)	$	47.3

Unaudited Condensed Consolidating Statement of Operations

For the three months ended June 30, 2010

(In millions, except per share data)

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	209.7		$	87.7		$	508.3		$	(357.4	)	$	448.3
Cost of goods sold		207.5			73.0			438.0			(347.1	)		371.4
Gross profit		2.2			14.7			70.3			(10.3	)		76.9
Operating expenses:
Marketing and administration		34.6			13.8			24.2			—			72.6
Research and development		8.1			1.1			2.3			—			11.5
Restructuring charges		1.4			—			—			—			1.4
Insurance recovery		—			(11.9	)		—			—			(11.9	)
Operating (loss) income		(41.9	)		11.7			43.8			(10.3	)		3.3
Non-operating (income) expense:
Interest expense		(0.5	)		1.1			6.2			(0.8	)		6.0
Interest income		—			(0.9	)		(1.7	)		0.8			(1.8	)
Decline in fair value of warrant		—			—			6.8			—			6.8
Other, net		(24.3	)		0.4			8.3			8.6			(7.0	)
Total non-operating (income) expense		(24.8	)		0.6			19.6			8.6			4.0
(Loss) income before income tax (benefit) expense and investment in subsidiary earnings (loss)		(17.1	)		11.1			24.2			(18.9	)		(0.7	)
Income tax (benefit) expense		(13.7	)		(4.6	)		4.6			(2.4	)		(16.1	)
(Loss) income before investment in subsidiary earnings (loss)		(3.4	)		15.7			19.6			(16.5	)		15.4
Investment in subsidiary earnings (loss)		17.2			(5.4	)		—			(11.8	)		—
Net income		13.8			10.3			19.6			(28.3	)		15.4
Net income attributable to noncontrolling interests		—			(0.3	)		(1.3	)		—			(1.6	)
Net income attributable to MEMC stockholders	$	13.8		$	10.0		$	18.3		$	(28.3	)	$	13.8

Unaudited Condensed Consolidating Statement of Operations

For the six months ended June 30, 2011

(In millions, except per share data)

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	440.4		$	252.2		$	1,947.6		$	(1,158.7	)	$	1,481.5
Cost of goods sold		452.3			244.6			1,627.0			(1,137.5	)		1,186.4
Gross margin		(11.9	)		7.6			320.6			(21.2	)		295.1
Operating expenses:
Marketing and administration		81.8			43.0			62.2			—			187.0
Research and development		30.8			4.2			7.8			—			42.8
Restructuring and impairment charges		6.7			0.4			6.7			—			13.8
Operating (loss) income		(131.2	)		(40.0	)		243.9			(21.2	)		51.5
Non-operating (income) expense:
Interest expense		14.3			0.6			16.0			(0.7	)		30.2
Interest income		(0.2	)		(0.4	)		(1.9	)		0.7			(1.8	)
Decline in fair value of warrant		—			—			0.3			—			0.3
Other, net		(22.7	)		(1.3	)		(0.2	)		6.6			(17.6	)
Total non-operating (income) expense		(8.6	)		(1.1	)		14.2			6.6			11.1
(Loss) income before income tax (benefit) expense, equity in earnings of joint venture and investment in subsidiary earnings		(122.6	)		(38.9	)		229.7			(27.8	)		40.4
Income tax (benefit) expense		(44.7	)		0.9			31.3			(0.9	)		(13.4	)
(Loss) income before equity in (loss) earnings of joint venture and investment in subsidiary earnings		(77.9	)		(39.8	)		198.4			(26.9	)		53.8
Investment in subsidiary earnings		120.8			112.4			—			(233.2	)		—
Equity in (loss) earnings of joint venture, net of tax		(0.1	)		—			3.4			—			3.3
Net income		42.8			72.6			201.8			(260.1	)		57.1
Net loss (income) attributable to noncontrolling interests		—			0.1			(14.4	)		—			(14.3	)
Net income attributable to MEMC stockholders	$	42.8		$	72.7		$	187.4		$	(260.1	)	$	42.8

Unaudited Condensed Consolidating Statement of Operations

For the six months ended June 30, 2010

(In millions, except per share data)

	MEMC, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net sales	$	408.3		$	168.2		$	1,010.5		$	(701.0	)	$	886.0
Cost of goods sold		405.5			150.7			882.1			(688.5	)		749.8
Gross profit		2.8			17.5			128.4			(12.5	)		136.2
Operating expenses:
Marketing and administration		63.4			28.4			43.0			—			134.8
Research and development		16.3			1.9			4.4			—			22.6
Restructuring charges		2.7			—			—			—			2.7
Insurance recovery		—			(11.9	)		—			—			(11.9	)
Operating (loss) income		(79.6	)		(0.9	)		81.0			(12.5	)		(12.0	)
Non-operating (income) expense:
Interest expense		(1.1	)		2.3			19.4			(2.5	)		18.1
Interest income		(0.1	)		(2.4	)		(4.1	)		2.5			(4.1	)
Decline in fair value of warrant		—			—			12.1			—			12.1
Other, net		(28.8	)		0.3			13.1			9.0			(6.4	)
Total non-operating (income) expense		(30.0	)		0.2			40.5			9.0			19.7
(Loss) income before income tax benefit, equity in (loss) earnings of joint venture and investment in subsidiary earnings (loss)		(49.6	)		(1.1	)		40.5			(21.5	)		(31.7	)
Income tax (benefit) expense		(31.2	)		(4.1	)		8.0			(3.4	)		(30.7	)
(Loss) income before equity in (loss) earnings of joint venture and investment in subsidiary earnings (loss)		(18.4	)		3.0			32.5			(18.1	)		(1.0	)
Investment in subsidiary earnings		24.1			(8.5	)		—			(15.6	)		—
Equity in (loss) earnings of joint venture, net of tax		(1.5	)		—			8.8			—			7.3
Net income (loss)		4.2			(5.5	)		41.3			(33.7	)		6.3
Net income attributable to noncontrolling interests		—			(0.3	)		(1.8	)		—			(2.1	)
Net income (loss) attributable to MEMC stockholders	$	4.2		$	(5.8	)	$	39.5		$	(33.7	)	$	4.2

Unaudited Condensed Consolidating Balance Sheet

June 30, 2011

(In millions, except per share data)

	MEMC, Inc		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	209.8	$	17.3		$	424.8	$	—		$	651.9
Restricted cash		—		0.5			37.6		—			38.1
Accounts receivable, net		72.3		15.2			185.4					272.9
Inventories		44.5		107.7			274.5		(91.3	)		335.4
Solar energy systems held for development and sale		—		43.3			197.5		(14.3	)		226.5
Income taxes receivable		19.2		—			6.4		—			25.6
Prepaid and other current assets		22.5		6.0			240.7		—			269.2
Total current assets		368.3		190.0			1,366.9		(105.6	)		1,819.6
Investments		2.8		5.0			137.4					145.2
Investments in subsidiaries		1,878.5		1,018.1			—		(2,896.6	)		—
Property, plant and equipment, net:
Semiconductor and Solar Materials, net		83.2		325.3			1,298.6		(29.6	)		1,677.5
Solar energy systems, net		—		49.2			590.0		100.8			740.0
Deferred tax assets, net		138.2		(27.7	)		100.8		—			211.3
Restricted cash		—		0.2			19.8		—			20.0
Other assets		41.6		25.3			161.9		—			228.8
Goodwill		—		342.7			62.2		—			404.9
Intangible assets, net		—		46.9			3.2		—			50.1
Total assets	$	2,512.6	$	1,975.0		$	3,740.8	$	(2,931.0	)	$	5,297.4

Unaudited Condensed Consolidating Balance Sheet

June 30, 2011

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	—		$	2.0		$	8.7		$	—		$	10.7
Short-term solar energy system financing, current portion of solar energy system financing and capital lease obligations		—			0.2			58.8			—			59.0
Accounts payable		19.8			81.2			507.4			—			608.4
Accrued liabilities		67.5			28.3			84.8			—			180.6
Contingent consideration related to acquisitions		—			46.0			5.0			—			51.0
Accrued wages and salaries		15.7			11.9			29.9			—			57.5
Deferred revenue for solar energy systems		—			5.8			22.0			—			27.8
Customer deposits		4.2			0.6			55.4			—			60.2
Intercompany (receivable) payable and short term notes		(411.9	)		414.6			(2.7	)		—			—
Income taxes payable		(16.1	)		(4.5	)		100.8			—			80.2
Total current liabilities		(320.8	)		586.1			870.1			—			1,135.4
Long-term debt and capital lease obligations, less current portion		550.0			—			91.5			—			641.5
Long-term solar energy system financing and capital lease obligations, less current portion		—			1.9			691.3			—			693.2
Pension and post-employment liabilities		24.2			—			31.9			—			56.1
Deferred revenue for solar energy systems		—			1.0			111.7			—			112.7
Semiconductor and Solar Materials deferred revenue		—			—			52.7			—			52.7
Long-term intercompany note (receivable) payable		(163.1	)		(24.6	)		187.7			—			—
Other liabilities		44.5			5.5			129.4			—			179.4
Total liabilities		134.8			569.9			2,166.3			—			2,871.0
Total MEMC stockholders' equity		2,377.8			1,405.1			1,525.9			(2,931.0	)		2,377.8
Noncontrolling interests		—			—			48.6			—			48.6
Total stockholders' equity		2,377.8			1,405.1			1,574.5			(2,931.0	)		2,426.4
Total liabilities and stockholders' equity	$	2,512.6		$	1,975.0		$	3,740.8		$	(2,931.0	)	$	5,297.4

Unaudited Condensed Consolidating Balance Sheet

December 31, 2010

(In millions, except per share data)

	MEMC, Inc		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	15.5	$	7.2		$	684.6	$	—		$	707.3
Restricted cash		10.7		0.5			32.6		—			43.8
Accounts receivable, net		87.5		8.0			200.5		—			296.0
Inventories		33.3		59.0			163.2		(40.9	)		214.6
Solar energy systems held for development and sale		—		8.6			235.8		(6.9	)		237.5
Income taxes receivable		16.7		17.4			1.5		—			35.6
Prepaid and other current assets		19.0		9.2			174.3		—			202.5
Total current assets		182.7		109.9			1,492.5		(47.8	)		1,737.3
Investments		2.3		15.4			95.0		(2.4	)		110.3
Investments in subsidiaries		1,758.8		911.5			—		(2,670.3	)		—
Property, plant and equipment, net:
Semiconductor and Solar Materials, net		78.5		328.7			1,083.4		(24.7	)		1,465.9
Solar energy systems, net		—		4.2			511.9		51.5			567.6
Deferred tax assets, net		138.1		(27.7	)		28.9		—			139.3
Restricted cash		—		0.2			18.5		—			18.7
Other assets		25.2		19.9			132.5		—			177.6
Goodwill		—		342.7			—		—			342.7
Intangible assets, net		—		52.5			—		—			52.5
Total assets	$	2,185.6	$	1,757.3		$	3,362.7	$	(2.693.7	)	$	4,611.9

Unaudited Condensed Consolidating Balance Sheet

December 31, 2010

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	—		$	2.8		$	3.6		$	—		$	6.4
Short-term solar energy system financing, current portion of solar energy system financing and capital lease obligations		—			0.3			65.4			—			65.7
Accounts payable		20.9			115.9			608.7			—			745.5
Accrued liabilities		44.9			39.3			81.2			—			165.4
Contingent consideration related to acquisitions		—			106.4			—			—			106.4
Accrued wages and salaries		15.6			9.3			25.5			—			50.4
Deferred revenue for solar energy systems		—			—			8.8			—			8.8
Customer deposits		0.1			0.6			92.2			—			92.9
Intercompany (receivable) payable and short-term notes		(93.9	)		131.9			(38.0	)		—			—
Income taxes payable		11.0			(14.0	)		45.6			—			42.6
Total current liabilities		(1.4	)		392.5			893.0			—			1,284.1
Long-term debt and capital lease obligations, less current portion		—			—			20.5			—			20.5
Long-term solar energy system financing and capital lease obligations, less current portion		—			3.9			586.2			—			590.1
Pension and post-employment liabilities		28.6			—			25.5			—			54.1
Deferred revenue for solar energy systems		—			0.7			74.3			—			75.0
Semiconductor and Solar Materials deferred revenue		—			—			115.2			—			115.2
Long-term intercompany note (receivable) payable		(125.2	)		(23.6	)		148.8			—			—
Other liabilities		31.9			2.8			142.6			—			177.3
Total liabilities		(66.1	)		376.3			2,006.1			—			2,316.3
Total MEMC stockholders' equity		2,251.7			1,381.0			1,312.7			(2,693.7	)		2,251.7
Noncontrolling interests		—			—			43.9			—			43.9
Total stockholders' equity		2,251.7			1,381.0			1,356.6			(2,693.7	)		2,295.6
Total liabilities and stockholders' equity	$	2,185.6		$	1,757.3		$	3,362.7		$	(2,693.7	)	$	4,611.9

Unaudited Condensed Consolidating Statement of Cash Flows

For the six months ended June 30, 2011

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	(332.3	)		24.2			183.5			98.2		$	(26.4	)
Cash flows from investing activities:
Purchases of cost and equity method investments		(0.5	)		(5.0	)		(43.8	)		—			(49.3	)
Capital expenditures		(14.4	)		(16.0	)		(277.7	)		—			(308.1	)
Construction of solar energy systems		—			—			(122.5	)		(104.2	)		(226.7	)
Restricted cash		—			—			(15.9	)		—			(15.9	)
Proceeds from sale of property, plant and equipment		—			—			37.1			—			37.1
Cash paid for acquisition, net of cash acquired		—			(28.7	)					—			(28.7	)
Payments to vendors for deposits and loans		—			(14.4	)		(4.4	)		—			(18.8	)
Equity infusions or investments in subsidiaries		—			—			—			—			—
Proceeds from return of equity method investments		—			13.7			—			—			13.7
Other		1.0			0.4			(8.0	)		6.0			(0.6	)
Net cash used in investing activities		(13.9	)		(50.0	)		(435.2	)		(98.2	)		(597.3	)
Cash flows from financing activities:
Senior notes issuance		550.0			—			—			—			550.0
Net repayments of customer deposits related to long-term supply agreements		—			(0.9	)		(50.3	)		—			(51.2	)
Cash paid for SunEdison acquisition contingent consideration		—			(50.2	)		—			—			(50.2	)
Collection on (repayments of) intercompany debt		11.2			88.9			(100.1	)		—			—
Principal payments on long term debt		—			—			(1.8	)		—			(1.8	)
Proceeds from financing obligations		—			—			217.6			—			217.6
Repayments of financing and capital lease obligations		—			(1.8	)		(65.1	)		—			(66.9	)
Common stock repurchased		(2.7	)		—			—			—			(2.7	)
Return of investment and dividends to noncontrolling interest		—			—			(15.2	)		—			(15.2	)
Debt financing fees		(18.0	)		—			(5.4	)		—			(23.4	)
Net cash provided by (used in) financing activities		540.5			36.0			(20.3	)		—			556.2
Effect of exchange rate changes on cash and cash equivalents		—			(0.1	)		12.2			—			12.1
Net increase (decrease) in cash and cash equivalents		194.3			10.1			(259.8	)		—			(55.4	)
Cash and cash equivalents at beginning of period		15.5			7.2			684.6			—			707.3
Cash and cash equivalents at end of period	$	209.8		$	17.3		$	424.8		$	—		$	651.9

Unaudited Condensed Consolidating Statement of Cash Flows

For the six months ended June 30, 2010

(In millions, except per share data)

	MEMC, Inc			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net cash provided by  (used in) operating activities	$	15.4		$	(2.0	)	$	(83.7	)	$	79.0		$	8.7
Cash flows from investing activities:
Proceeds from sale and maturities of investments		—			—			146.8			—			146.8
Capital expenditures		(11.0	)		(13.2	)		(116.9	)		—			(141.1	)
Construction of solar energy systems		—			(1.3	)		(24.1	)		(86.3	)		(111.7	)
Purchases of cost and equity method investments		—			—			(10.0	)		—			(10.0	)
Payments to vendors for deposits and loans		—			—			(28.0	)		—			(28.0	)
Proceeds from return of equity method investments		77.6			—			—			—			77.6
Cash received from net investment hedge		18.5			—			—			—			18.5
Equity infusions or investments in subsidiaries		1.1			0.9			(2.0	)		—			—
Restricted cash		—			(0.3	)		6.3			—			6.0
Other		8.6			0.7			(13.9	)		7.3			2.7
Net cash provided by (used in) investing activities		94.8			(13.2	)		(41.8	)		(79.0	)		(39.2	)
Cash flows from financing activities:
Net repayments of customer deposits related to long-term supply agreements		—			—			(27.7	)		—			(27.7	)
(Repayments of) collections on intercompany debt		(15.4	)		(16.6	)		32.0			—			(0.0	)
Principal payments on long-term debt		—			—			(3.0	)		—			(3.0	)
Proceeds from financing obligations		—			—			106.6			—			106.6
Repayments of financing and capital lease obligations		—			(1.1	)		(14.7	)		—			(15.8	)
Proceeds from noncontrolling interests		—			—			9.7			—			9.7
Common stock repurchased		(0.3	)		—			—			—			(0.3	)
Debt financing fees		(0.1	)		—			(8.9	)		—			(9.0	)
Net cash (used in) provided by  financing activities		(15.8	)		(17.7	)		94.0			—			60.5
Effect of exchange rate changes on cash and cash equivalents		(0.1	)		—			(9.6	)		—			(9.7	)
Net increase (decrease) in cash and cash equivalents		94.3			(32.9	)		(41.1	)		—			20.3
Cash and cash equivalents at beginning of period		105.9			49.7			477.1			—			632.7
Cash and cash equivalents at end of period	$	200.2		$	16.8		$	436.0		$	—		$	653.0

XML



Deferred Revenue and Profit (Schedule of Deferred Revenue and Profit) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010
Short-term deposits on solar energy systems	$ 27.8	$ 8.8
Total deferred revenue	220.2		199.0
Solar Energy [Member]
Short-term deposits on solar energy systems	27.8		8.8
Profit deferrals on solar energy system sales	99.4		63.2
Deferred subsidy revenue	13.3		11.8
Total deferred revenue	140.5		83.8
Semiconductor and Solar Materials [Member]
Short-term deferred revenue	27.0
Long-term deferred revenue	52.7		115.2
Total deferred revenue	$ 79.7		$ 115.2

XML



Stockholders' Equity (Outstanding Restricted Stock) (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Outstanding at December 31,2010	13,259,245
Granted	4,233,683
Forfeited	(84,142)
Outstanding at June 30, 2011	17,367,394
Outstanding at June 30, 2011, Aggregate Intrinsic Value	$ 0.25
Outstanding at June 30, 2011, Weighted Average Remaining Contractual Life, years	8
Restricted Stock Units (RSUs) [Member]
Outstanding at December 31,2010	4,017,290
Granted	2,168,198
Converted	(658,604)
Forfeited	(114,926)
Outstanding at June 30, 2011	5,387,145
Outstanding at June 30, 2011, Aggregate Intrinsic Value	$ 49.10
Outstanding at June 30, 2011, Weighted Average Remaining Contractual Life, years	3

XML



Basis of Presentation

6 Months Ended

Jun. 30, 2011

Basis of Presentation

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 Commission's ("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 ("U.S. GAAP"). These unaudited condensed consolidated financial statements should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2010, which contains MEMC's audited financial statements for such year. Operating results for the three and six month periods ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

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 including warranties, employee benefits, derivatives, stock based compensation, income taxes, solar energy system installation and related costs, percentage-of-completion on long-term construction contracts, the fair value of assets and liabilities recorded 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.

New Significant Accounting Policies

Revenue Arrangements with Multiple Deliverables

In October 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2009-13 ("ASU
2009-13"), which updates the current guidance pertaining to multiple-element revenue arrangements included in Accounting Standards Codification ("ASC") Subtopic 605-25. The Company adopted this guidance on January 1, 2011.

SunEdison solar energy system sales and post-system-sale operation and maintenance service contracts are usually negotiated and executed contemporaneously, which we evaluate together as a single arrangement with multiple deliverables in accordance with ASC 605-25, Multiple-Element-Arrangements, as updated by the FASB issued Accounting Standards Update 2009-13. Under ASC 605-25, we allocate revenue for transactions involving multiple elements to each unit of accounting based on its relative selling price, and recognize revenue for each unit of accounting when the revenue recognition criteria have been met.

New Accounting Standards Adopted

In April 2010, the FASB issued Accounting Standards Update 2010-17 ("ASU 2010-17"), which updates the current guidance pertaining to the milestone method of revenue recognition included in ASC Topic 605. This guidance was adopted on January 1, 2011 and did not have a material impact on MEMC's financial position or results of operations.

In December 2010, the FASB issued Accounting Standards Update 2010-28 ("ASU 2010-28") which affects all entities that have recognized goodwill and have one or more reporting units whose carrying amount for purposes of performing Step 1 of the goodwill impairment test is zero or negative. This guidance modifies Step 1 so that for those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. This guidance is effective for annual reporting periods beginning after December 15, 2010 on a prospective basis. This update was adopted as of January 1, 2011 and did not have a material impact on MEMC's financial position.

XML



Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2011

Goodwill and Intangible Assets

Goodwill and Intangible Assets

(10) Goodwill and Intangible Assets

Intangible assets at June 30, 2011 and December 31, 2010 are as follows:

	Weighted Average Amortization Period	Gross Carrying Amount				Accumulated Amortization or Allocated to Solar Energy System						Net Carrying Amount
		June 30,		December 31,		June 30,			December 31,			June 30,		December 31,
Dollars in millions		2011		2010		2011			2010			2011		2010
Amortizable intangible assets:
Favorable energy credits	7	$	14.2	$	14.2	$	(4.7	)	$	(3.2	)	$	9.5	$	11.0
Customer relationships(1)	6		6.5		5.4		(1.4	)		(0.8	)		5.1		4.6
Trade name	15		4.1		4.1		(0.4	)		(0.3	)		3.7		3.8
Internally developed software	3		1.8		1.3		(0.8	)		(0.5	)		1.0		0.8
Developed technology(1)	5		20.0		20.0		(2.7	)		(1.3	)		17.3		18.7
Customer sales backlog(1)	1		0.4		0.4		(0.4	)		(0.2	)		—		0.2
Total amortizable intangible assets		$	47.0	$	45.4	$	(10.4	)	$	(6.3	)	$	36.6	$	39.1
Indefinite lived assets:
In-process technology(1)	Indefinite	$	0.3	$	0.3	$	—		$	—		$	0.3	$	0.3
Power plant development arrangements(2)	Indefinite		19.8		18.0		(6.6	)		(4.9	)		13.2		13.1
Total indefinite lived assets		$	20.1	$	18.3	$	(6.6	)	$	(4.9	)	$	13.5	$	13.4

⁽¹⁾ These intangibles represent the amounts acquired in the Solaicx acquisition, except there is a carrying amount of $7.1 million for SunEdison included within the customer relationships intangible. The useful life for in-process technology will be determined once the research and development process is complete and at that time amortization of the asset will begin.

⁽²⁾ Power plant development arrangements are allocated to the solar energy system (fixed assets or inventory) upon completion of the related solar energy systems stemming from the backlog at the date of acquisition.

During the first quarter of 2011, SunEdison completed the acquisition of 100% of the voting equity of a company for a purchase price of $9.1 million, of which $5.0 million relates to contingent consideration. We recorded $7.1 million and $2.0 million to goodwill and acquired intangible assets, respectively.

During the three months ended June 30, 2011, SunEdison completed the acquisition of 100% of the voting equity of another company for a preliminary GAAP purchase price of $71.6 million, of which an estimated $26.0 million relates to contingent consideration payable in cash and a fixed number of shares of MEMC stock. This acquisition, which included project pipeline, is intended to further develop our solar energy systems' business, leveraging the synergies between our Solar Energy and Solar Materials segments. We preliminarily recorded $55.9 million to goodwill. As of June 30, 2011, management has not completed the purchase accounting valuation for these transactions due to the ongoing review of the assumptions, methodologies and calculations of the fair value of the contingent consideration and acquired intangible assets. The total excess purchase price has been recorded to goodwill because we have not completed valuations of the expected intangible assets, primarily comprised of backlog. We anticipate allocating a portion of the recorded amount of goodwill to intangible assets upon completion of the valuations of the intangible assets. We have not provided proforma financial information because the acquisition is not considered significant.

As of June 30, 2011, MEMC had consolidated goodwill of $404.9 million of which $348.5 and $56.4 million is recorded in the Solar Energy reporting unit and Solar Materials reporting unit, respectively. We evaluate goodwill for impairment on an annual basis on the first day of December each fiscal year, as well as whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the interim period ended June 30, 2011, we evaluated whether events or changes in circumstances occurred which would require a detailed test of goodwill for impairment as of an interim date. As of June 30, 2011, MEMC had a net book value of approximately $2.4 billion and a market capitalization on our common stock of approximately $2.0 billion. During the last month of June 2011 and continuing through early August 2011, we have observed a strong correlation between the decline in our market capitalization and the decline in pricing in the solar wafer market. We evaluated the following items, among others, in determining whether there was sufficient evidence of material events or changes in circumstances requiring a detailed test of goodwill impairment as of an interim date: the impact of solar wafer price declines on our raw material costs for our Solar Energy reporting unit; advanced materials technologies at our Solar Materials reporting unit; the financial performance of each reporting unit in fiscal year 2011 to date; and our internal forecast data. Based on the above, we did not believe a detailed test of goodwill impairment was required as of June 30, 2011.

XML



Investments (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended			3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010	Mar. 31, 2011 Zhenjiang Huantai (formerly Jiangsu Huantai) Joint Venture [Member]	Jun. 30, 2011 Zhenjiang Huantai (formerly Jiangsu Huantai) Joint Venture [Member]	Jun. 30, 2010 Zhenjiang Huantai (formerly Jiangsu Huantai) Joint Venture [Member]	Jun. 30, 2011 Samsung Fine Chemicals Joint Venture [Member]	Jun. 30, 2011 MEMC, Inc. [Member]
Equity contribution in joint venture	$ 86.2	$ 49.3	$ 10.0		$ 17.8				$ 0.5
Total remaining contractual investment commitment in joint venture		179.4
Short-term loan provided to joint venture					3.1
Equity method investments	23.6	23.6		23.1		58.1	10.0	13.8
Ownership interest in joint venture								50.00%	50.00%
Debt and equity commitments in joint venture								175.0
Investment, at fair value	35.4	35.4		41.1
Investment, at cost	$ 12.4	$ 12.4

XML



Debt and Capital Lease Obligations (Narrative) (Details) (USD $)	6 Months Ended		6 Months Ended				6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2011 Maximum [Member]	Jun. 30, 2011 Minimum [Member]	Jun. 30, 2011 LIBOR [Member]	Jun. 30, 2011 PRIME [Member]	Jun. 30, 2011 Senior Notes [Member]	Jun. 30, 2011 Corporate Credit Facility [Member]	Jun. 30, 2011 Finance and Capital Lease Obligations [Member]	Jun. 30, 2010 Finance and Capital Lease Obligations [Member]
Long-term committed financing arrangements maximum amount									$ 1,003,000,000
Short-term committed financing arrangements maximum amount									59,000,000
Long-term committed financing arrangements outstanding amount									572,300,000
Short-term committed financing arrangements outstanding amount										59,000,000
Short-term committed financing arrangements unavailable amount due to third party letters of credit									37,800,000
Long-term committed financing arrangements unavailable amount due to third party letters of credit									125,100,000
Long-term committed financing arrangements commitment fees maximum percentage									1.00%
Senior Notes, Issuance date							March 10, 2011
Senior notes, issued amount							550,000,000
Senior notes, maturity date							Apr. 01, 2019
Debt issuance costs, amortized period (in years)							8	3
Senior note, interest rate							7.75%
Debt issuance cost							13,800,000	4,600,000
Senior notes sold at a fixed percentage of the principal amount							100.00%
Senior notes, frequency of interest payment							semi-annually
Amended corporate credit facility maximum amount								400,000,000
Restated corporate credit facility maximum amount								550,000,000
Corporate credit facility percentage of security secured by a pledge of the capital stock								65.00%
Interest rate					2.75%	1.75%
Commitment fee percentage on unused capacity								0.50%
Outstanding Third Party Letters of Credit Backed Corporate Credit Facility								109,800,000
Short-term debt									29,000,000
Capital lease obligations									118,200,000
Finance obligations									605,000,000
Recourse finance obligations excluded									36,600,000
Sale and leaseback agreement amount	120,000,000
Sale and leaseback available amount	112,600,000
Aggregate amounts of minimum lease payments on our financing sale leaseback transactions	365,000,000
Purchase price percent if change of control of MEMC occurs							101.00%
Number of days notice to redeem note			60	30
Capital leases for equipment and other debt	79,900,000	2,900,000
Capital leases related to long term supply agreement	$ 77,600,000

XML



Income Taxes (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2010	Jun. 30, 2011	Dec. 31, 2010
Income Taxes
Amount held and subject to foreign repatriation tax effect	$ 297.4
Valuation allowance on the U.S. deferred tax assets		7.2
Total deferred tax assets		245.4	172.7
Total reserve for uncertain tax positions, current		13.1
Total reserve for uncertain tax positions		$ 45.2	$ 32.1

XML



Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2011

Goodwill and Intangible Assets

Intangible Assets

	Weighted Average Amortization Period	Gross Carrying Amount				Accumulated Amortization or Allocated to Solar Energy System						Net Carrying Amount
		June 30,		December 31,		June 30,			December 31,			June 30,		December 31,
Dollars in millions		2011		2010		2011			2010			2011		2010
Amortizable intangible assets:
Favorable energy credits	7	$	14.2	$	14.2	$	(4.7	)	$	(3.2	)	$	9.5	$	11.0
Customer relationships(1)	6		6.5		5.4		(1.4	)		(0.8	)		5.1		4.6
Trade name	15		4.1		4.1		(0.4	)		(0.3	)		3.7		3.8
Internally developed software	3		1.8		1.3		(0.8	)		(0.5	)		1.0		0.8
Developed technology(1)	5		20.0		20.0		(2.7	)		(1.3	)		17.3		18.7
Customer sales backlog(1)	1		0.4		0.4		(0.4	)		(0.2	)		—		0.2
Total amortizable intangible assets		$	47.0	$	45.4	$	(10.4	)	$	(6.3	)	$	36.6	$	39.1
Indefinite lived assets:
In-process technology(1)	Indefinite	$	0.3	$	0.3	$	—		$	—		$	0.3	$	0.3
Power plant development arrangements(2)	Indefinite		19.8		18.0		(6.6	)		(4.9	)		13.2		13.1
Total indefinite lived assets		$	20.1	$	18.3	$	(6.6	)	$	(4.9	)	$	13.5	$	13.4

⁽¹⁾ These intangibles represent the amounts acquired in the Solaicx acquisition, except there is a carrying amount of $7.1 million for SunEdison included within the customer relationships intangible. The useful life for in-process technology will be determined once the research and development process is complete and at that time amortization of the asset will begin.

⁽²⁾ Power plant development arrangements are allocated to the solar energy system (fixed assets or inventory) upon completion of the related solar energy systems stemming from the backlog at the date of acquisition.

XML



Variable Interest Entities

6 Months Ended

Jun. 30, 2011

Variable Interest Entities

Variable Interest Entities

(14) Variable Interest Entities

We are the primary beneficiary of four variable interest entities ("VIEs") in solar energy projects that we consolidate as of June 30, 2011, all of which existed and were consolidated by the Company as of December 31, 2010. During the six months ended June 30, 2011, four solar energy system project companies that were consolidated as of December 31, 2010 were sold and deconsolidated. The carrying amounts and classification of our consolidated VIEs' assets and liabilities included in our consolidated financial statements are as follows:

In millions	As of June 30,  2011		As of December 31,  2010
Current assets	$	43.9	$	173.0
Noncurrent assets		62.9		63.1
Total assets	$	106.8	$	236.1
Current liabilities	$	9.8	$	38.5
Noncurrent liabilities		87.3		107.8
Total liabilities	$	97.1	$	146.3

The amounts shown in the table above exclude intercompany balances which are eliminated upon consolidation. All of the assets in the table above are restricted for settlement of the VIE obligations and all of the liabilities in the table above can only be settled using VIE resources.

XML



Condensed Consolidated Statements of Operations (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Operations
Net sales (includes income from Suntech agreement of $149.4 for the three and six months ended June 30, 2011 - see Note 15)	$ 745.6	$ 448.3	$ 1,481.5	$ 886.0
Cost of goods sold (includes take or pay charges of $52.4 for the three and six months ended June 30, 2011 - see Note 16)	564.5	371.4	1,186.4	749.8
Gross profit	181.1	76.9	295.1	136.2
Operating expenses:
Marketing and administration	94.0	72.6	187.0	134.8
Research and development	21.8	11.5	42.8	22.6
Restructuring and impairment charges	13.6	1.4	13.8	2.7
Insurance recovery		(11.9)		(11.9)
Operating income (loss)	51.7	3.3	51.5	(12.0)
Non-operating expense (income):
Interest expense	21.2	6.0	30.2	18.1
Interest income	(0.9)	(1.8)	(1.8)	(4.1)
Decline in fair value of warrant	1.9	6.8	0.3	12.1
Other, net	(17.2)	(7.0)	(17.6)	(6.4)
Total non-operating expense	5.0	4.0	11.1	19.7
Income (loss) before income taxes benefit and equity in earnings of joint venture	46.7	(0.7)	40.4	(31.7)
Income tax expense (benefit)	0.9	(16.1)	(13.4)	(30.7)
Income (loss) before equity in earnings of joint venture	45.8	15.4	53.8	(1.0)
Equity in earnings of joint venture, net of tax	2.0		3.3	7.3
Net income	47.8	15.4	57.1	6.3
Net income attributable to noncontrolling interests	(0.5)	(1.6)	(14.3)	(2.1)
Net income attributable to MEMC stockholders	$ 47.3	$ 13.8	$ 42.8	$ 4.2
Basic income per share	$ 0.21	$ 0.06	$ 0.19	$ 0.02
Diluted income per share	$ 0.21	$ 0.06	$ 0.19	$ 0.02
Weighted-average shares used in computing basic income per share	229.8	226.8	229.4	226.8
Weighted-average shares used in computing diluted income per share	230.9	228.0	231.0	227.9

XML



Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2011

Stockholders' Equity

Changes in Stockholders Equity

In millions	MEMC Stockholders' Equity		Noncontrolling Interest			Total
Balance, January 1, 2011	$	2,251.7	$	43.9		$	2,295.6
Net income		42.8		14.3			57.1
Other comprehensive income, net of tax		40.7		4.3			45.0
Stock issued for SunEdison contingent consideration		24.5		—			24.5
Stock plans, net		18.1		—			18.1
Distributions to noncontrolling interest		—		(13.9	)		(13.9	)
Balance, June 30, 2011	$	2,377.8	$	48.6		$	2,426.4

Outstanding Stock Options

	Shares			Weighted- Average Exercise Price		Aggregate Intrinsic  Value (in millions)		Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2010		13,259,245		$	21.88
Granted		4,233,683			11.83
Exercised		(10,033	)		8.73
Forfeited		(84,142	)		12.53
Expired		(31,359	)		27.78
Outstanding at June 30, 2011		17,367,394		$	19.48	$	0.25		8
Options exercisable at June 30, 2011		5,831,677		$	28.61	$	0.22		6

Weighted-Average Assumptions

	Six Months Ended			Six Months Ended
	June 30, 2011			June 30, 2010
Risk-free interest rate		1.7	%		2.2	%
Expected stock price volatility		65.7	%		67.5	%
Expected term until exercise (years)		5			4
Expected dividends		0.0	%		0.0	%

Outstanding Restricted Stock Units

	Restricted Stock Units			Aggregate  Intrinsic Value (in millions)		Weighted Average Remaining Contractual Life
Outstanding at December 31, 2010		4,017,290
Granted		2,168,198
Converted		(658,604	)
Forfeited		(114,926	)
Outstanding at June 30, 2011		5,387,145		$	49.1		3

XML



Condensed Consolidating Financial Information (Condensed Consolidating Statement of Cash Flows) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Net cash provided by operating activities	$ (26.4)	$ 8.7
Proceeds from sale and maturities of investments		146.8
Purchases of cost and equity method investments	(49.3)	(10.0)
Capital expenditures	(308.1)	(141.1)
Construction of solar energy systems	(226.7)	(111.7)
Restricted cash	(15.9)	6.0
Proceeds from sale of property, plant and equipment	37.1
Cash paid for acquisitions, net of cash acquired	(28.7)
Payments to vendors for refundable deposits on long-term agreements	(18.8)	(28.0)
Proceeds from return of equity method investment	13.7	77.6
Cash received from net investment hedges		18.5
Other	(0.6)	2.7
Net cash (used in) provided by investing activities	(597.3)	(39.2)
Senior notes issuance	550.0
Net repayments of customer deposits related to long-term supply agreements	(51.2)	(27.7)
Cash paid for SunEdison acquisition contingent consideration	(50.2)
Collection on (repayments of) intercompany debt		0
Principal payments on long-term debt	(1.8)	(3.0)
Proceeds from financing obligations	217.6	106.6
Repayments of financing and capital lease obligations	(66.9)	(15.8)
Return of investment and dividends to noncontrolling interests	(15.2)
Proceeds from noncontrolling interests		9.7
Common stock issued and repurchased	(2.7)	(0.3)
Debt financing fees	(23.4)	(9.0)
Net cash provided by (used in) financing activities	556.2	60.5
Effect of exchange rate changes on cash and cash equivalents	12.1	(9.7)
Net increase (decrease) in cash and cash equivalents	(55.4)	20.3
Cash and cash equivalents at beginning of period	707.3	632.7
Cash and cash equivalents at end of period	651.9	653.0
MEMC, Inc. [Member]
Net cash provided by operating activities	(332.3)	15.4
Purchases of cost and equity method investments	(0.5)
Capital expenditures	(14.4)	(11.0)
Proceeds from return of equity method investment		77.6
Cash received from net investment hedges		18.5
Equity infusions or investment in subsidiaries		1.1
Other	1.0	8.6
Net cash (used in) provided by investing activities	(13.9)	94.8
Senior notes issuance	550.0
Collection on (repayments of) intercompany debt	11.2	(15.4)
Common stock issued and repurchased	(2.7)	(0.3)
Debt financing fees	(18.0)	(0.1)
Net cash provided by (used in) financing activities	540.5	(15.8)
Effect of exchange rate changes on cash and cash equivalents		(0.1)
Net increase (decrease) in cash and cash equivalents	194.3	94.3
Cash and cash equivalents at beginning of period	15.5	105.9
Cash and cash equivalents at end of period	209.8	200.2
Guarantor Subsidiaries [Member]
Net cash provided by operating activities	24.2	(2.0)
Purchases of cost and equity method investments	(5.0)
Capital expenditures	(16.0)	(13.2)
Construction of solar energy systems		(1.3)
Restricted cash		(0.3)
Cash paid for acquisitions, net of cash acquired	(28.7)
Payments to vendors for refundable deposits on long-term agreements	(14.4)
Proceeds from return of equity method investment	13.7
Equity infusions or investment in subsidiaries		0.9
Other	0.4	0.7
Net cash (used in) provided by investing activities	(50.0)	(13.2)
Net repayments of customer deposits related to long-term supply agreements	(0.9)
Cash paid for SunEdison acquisition contingent consideration	(50.2)
Collection on (repayments of) intercompany debt	88.9	(16.6)
Repayments of financing and capital lease obligations	(1.8)	(1.1)
Net cash provided by (used in) financing activities	36.0	(17.7)
Effect of exchange rate changes on cash and cash equivalents	(0.1)
Net increase (decrease) in cash and cash equivalents	10.1	(32.9)
Cash and cash equivalents at beginning of period	7.2	49.7
Cash and cash equivalents at end of period	17.3	16.8
Non-Guarantor Subsidiaries [Member]
Net cash provided by operating activities	183.5	(83.7)
Proceeds from sale and maturities of investments		146.8
Purchases of cost and equity method investments	(43.8)	(10.0)
Capital expenditures	(277.7)	(116.9)
Construction of solar energy systems	(122.5)	(24.1)
Restricted cash	(15.9)	6.3
Proceeds from sale of property, plant and equipment	37.1
Payments to vendors for refundable deposits on long-term agreements	(4.4)	(28.0)
Equity infusions or investment in subsidiaries		(2.0)
Other	(8.0)	(13.9)
Net cash (used in) provided by investing activities	(435.2)	(41.8)
Net repayments of customer deposits related to long-term supply agreements	(50.3)	(27.7)
Collection on (repayments of) intercompany debt	(100.1)	32.0
Principal payments on long-term debt	(1.8)	(3.0)
Proceeds from financing obligations	217.6	106.6
Repayments of financing and capital lease obligations	(65.1)	(14.7)
Return of investment and dividends to noncontrolling interests	(15.2)
Proceeds from noncontrolling interests		9.7
Debt financing fees	(5.4)	(8.9)
Net cash provided by (used in) financing activities	(20.3)	94.0
Effect of exchange rate changes on cash and cash equivalents	12.2	(9.6)
Net increase (decrease) in cash and cash equivalents	(259.8)	(41.1)
Cash and cash equivalents at beginning of period	684.6	477.1
Cash and cash equivalents at end of period	424.8	436.0
Consolidating Adjustments [Member]
Net cash provided by operating activities	98.2	79.0
Construction of solar energy systems	(104.2)	(86.3)
Other	6.0	7.3
Net cash (used in) provided by investing activities	$ (98.2)	$ (79.0)

XML



Reportable Segments (Schedule of Reportable Segments) (Details) (USD $) In Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
Net sales	$ 745.6		$ 448.3		$ 1,481.5		$ 886.0
Operating income (loss)	51.7		3.3		51.5		(12.0)
Interest expense (income)	21.2		6.0		30.2		18.1
Depreciation and amortization	55.6		38.6		104.6		76.1
Capital expenditures	276.8		161.7		534.8		252.8
Construction of solar energy systems					226.7		111.7
MEMC, Inc. [Member]
Net sales	232.1		209.7		440.4		408.3
Operating income (loss)	(63.3)		(41.9)		(131.2)		(79.6)
Interest expense (income)	11.1		(0.5)		14.3		(1.1)
Semiconductor Materials [Member]
Net sales	275.3		249.6		526.8		468.9
Operating income (loss)	3.4		24.3		11.8		16.4
Interest expense (income)	(0.5)		0.2		(0.7)		0.3
Depreciation and amortization	31.0		26.2		61.6		52.5
Capital expenditures	34.0		31.6		84.7		50.5
Solar Materials [Member]
Net sales	323.1		168.0		649.4		325.7
Operating income (loss)	89.2		19.1		128.6		31.3
Interest expense (income)	1.8				1.1		0.1
Depreciation and amortization	17.3		7.3		29.7		14.2
Capital expenditures	65.2		62.9		219.5		90.2
Solar Energy [Member]
Net sales	147.2		30.7		305.3		91.4
Operating income (loss)	(8.4)		(4.4)		(15.0)		2.4
Interest expense (income)	7.1		4.9		12.2		16.0
Depreciation and amortization	7.3		5.1		13.3		9.4
Capital expenditures	175.3	[1]	67.1	[1]	228.3	[1]	112.0	[1]
Construction of solar energy systems	174.1		66.8		226.7		111.7
Corporate and Other [Member]
Operating income (loss)	(32.5)		(35.7)		(73.9)		(62.1)
Interest expense (income)	12.8		0.9		17.6		1.7
Capital expenditures	$ 2.3		$ 0.1		$ 2.3		$ 0.1

[1] Consists primarily of construction of solar energy systems of $174.1 million and $226.7 million in the three and six-months ended June 30, 2011, respectively, and $66.8 million and $111.7 million in the three and six-months ended June 30, 2010, respectively.

XML



Comprehensive Income (Loss) (Schedule of Comprehensive Income (Loss)) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net income	$ 47.8	$ 15.4	$ 57.1	$ 6.3
Net translation adjustment	17.4	(40.1)	40.6	(50.6)
Net unrealized loss on available-for-sale securities	(10.2)	(15.3)	(5.6)	(5.8)
Hedging instruments	(12.7)	(4.9)	10.2	(4.2)
Net actuarial loss, prior service credit, and transition obligation			(0.2)
Other comprehensive income (loss), net of tax	(5.5)	(60.3)	45.0	(60.6)
Total comprehensive income (loss)	42.3	(44.9)	102.1	(54.3)
Net income attributable to noncontrolling interests	(0.5)	(1.6)	(14.3)	(2.1)
Net translation adjustment attributable to noncontrolling interests	(3.1)	2.9	(4.3)	1.8
Comprehensive income (loss) attributable to MEMC stockholders	38.7	(43.6)	83.5	(54.6)
MEMC, Inc. [Member]
Net income	$ 47.3	$ 13.8	$ 42.8	$ 4.2

XML



Goodwill and Intangible Assets (Narrative) (Details) (USD $)	6 Months Ended
	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010
Business acquisition, percentage of voting interests acquired	100.00%	100.00%
Business acquisition, purchase price	$ 71,600,000	$ 9,100,000
Business acquisition, contingent consideration	26,000,000	5,000,000	80,200,000
Business acquisition, purchase price allocation to goodwill	55,900,000	7,100,000
Acquired finite lived intangible asset		2,000,000
Total consolidated goodwil	404,900,000
Net book value	2,400,000,000
Market capitalization on common stock	2,000,000,000
Solar Materials [Member]
Consolidated goodwill	56,400,000
Solar Energy [Member]
Consolidated goodwill	$ 348,500,000

XML



Stockholders' Equity (Weighted-Average Assumptions) (Details)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Stockholders' Equity
Risk-free interest rate	1.70%	2.20%
Expected stock price volatility	65.70%	67.50%
Expected term until exercise (years)	5	4
Expected dividends	0.00%	0.00%

XML



Fair Value Measurements (Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) (USD $) In Millions	6 Months Ended												6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2010 Available for Sale Investments [Member]	Jun. 30, 2010 Trading Investments [Member]	Jun. 30, 2010 Auction Rate Securities Right [Member]	Dec. 31, 2009 Auction Rate Securities Right [Member]	Jun. 30, 2011 Suntech Warrant [Member]	Dec. 31, 2010 Suntech Warrant [Member]	Jun. 30, 2010 Suntech Warrant [Member]	Dec. 31, 2009 Suntech Warrant [Member]	Jun. 30, 2011 Other Derivatives [Member]	Dec. 31, 2010 Other Derivatives [Member]	Jun. 30, 2011 Contingent Consideration Related to Acquisitions [Member]	Jun. 30, 2010 Contingent Consideration Related to Acquisitions [Member]	Dec. 31, 2009 Contingent Consideration Related to Acquisitions [Member]
Beginning Balance	$ (19.4)	$ (6.2)	$ 11.6	$ 38.4	$ 0.2	$ 2.0	$ 4.9	$ 5.2	$ 7.1	$ 19.2	$ 1.8	$ 1.6	$ (26.2)	$ (82.1)	$ (77.4)
Total unrealized gains included in other comprehensive income, net		0.2	0.2
Sales, redemptions and maturities		(42.1)	(9.2)	(32.9)
Acquisitions	(31.0)												(31.0)
Transfers out of Level 3, net		(2.6)	(2.6)
Ending Balance	$ (44.3)	$ (69.0)		$ 5.8	$ 0.2	$ 2.0	$ 4.9	$ 5.2	$ 7.1	$ 19.2	$ 1.8	$ 1.6	$ (51.0)	$ (82.1)	$ (77.4)

XML



Derivatives and Hedging Instruments (Narrative) (Details) (USD $) In Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Dec. 31, 2010
Derivatives and Hedging Instruments
Currency forward contracts, net notional amounts	$ 166.0	$ 166.0	$ 78.7
Notional amount of the currency forward contracts designated and accounted for as cash flow hedges	317.4	317.4	377.3
Gain reclassified from Accumulated Other Comprehensive Income into earnings for currency forward contracts	14.2	14.2
Interest rate swap instruments, notional amounts	85.1	85.1	146.2
Ineffectiveness of hedges recognized during period	$ 0.5	$ 0.7

XML



Solar Energy Systems Held for Development and Sale (Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Solar Energy Systems Held For Development and Sale
Under development	$ 183.0	$ 68.8
Systems held for sale	43.5	168.7
Held for development and sale, total	$ 226.5	$ 237.5

XML



Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2011

Variable Interest Entities

Carrying Amounts of Assets and Liabilities

In millions	As of June 30,  2011		As of December 31,  2010
Current assets	$	43.9	$	173.0
Noncurrent assets		62.9		63.1
Total assets	$	106.8	$	236.1
Current liabilities	$	9.8	$	38.5
Noncurrent liabilities		87.3		107.8
Total liabilities	$	97.1	$	146.3