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MEMC Electronic Materials Inc. Reports Operating Results (10-K)

February 22, 2011 | About:
10qk

10qk

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MEMC Electronic Materials Inc. (WFR) filed Annual Report for the period ended 2010-12-31.

Memc Electric Materials Inc. has a market cap of $3.32 billion; its shares were traded at around $14.59 with a P/E ratio of 48.63 and P/S ratio of 1.48. Hedge Fund Gurus that owns WFR: Steven Cohen of SAC Capital Advisors, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns WFR: Arnold Schneider of Schneider Capital Management, Arnold Van Den Berg of Century Management, Third Avenue Management, Ronald Muhlenkamp of Muhlenkamp Fund, Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

The aggregate market value of the registrants Common Stock held by nonaffiliates of the registrant, based upon the closing price of such stock on June 30, 2010 of $9.88 as reported by the New York Stock Exchange, and 227,416,482 shares outstanding on such date, was approximately $2,246,874,842. The number of shares outstanding of the registrants Common Stock as of February 18, 2011, was 230,310,008 shares.

We sell some of our semiconductor wafers to certain customers under consignment arrangements. Generally, these consignment arrangements require us to maintain a certain quantity of wafers in inventory at the customers facility or at a storage facility designated by the customer. Under these arrangements, we ship the wafers to the storage facility, but do not charge the customer or recognize revenue for those wafers until title passes to the customer. Title passes when the customer pulls the product from the assigned storage facility or storage area or, if the customer does not pull the product within a stated period of time (generally 60-90 days), at the end of that period, or when the customer otherwise agrees to take title to the product. Until that time, the wafers are considered part of MEMCs inventory and are reflected on MEMCs books and records as inventory. As such, these consignment arrangements are essentially inventory transfer arrangements. At December 31, 2010, we had approximately $25.0 million of inventory held on consignment, compared with approximately $18.9 million held on consignment at December 31, 2009.

During the third quarter of 2010, SunEdison executed a sales agreement to sell a 70MW photovoltaic solar energy system located in Italy (the Rovigo Plant) to an entity established jointly by First Reserve and SunEdison (the First Reserve Partnership). The total sales price of the Rovigo Plant to the First Reserve Partnership was approximately 276 million Euros (approximately $366 million). SunEdison also executed three additional sales agreements to sell three one megawatt solar energy systems to the First Reserve Partnership, for a total contract value of approximately 13 million Euros (approximately $18 million). SunEdison holds a 9.9% non-controlling interest in the First Reserve Partnership.

In 2010, SunEdison secured a three-year, $50 million construction revolver with Rabobank International for the deployment of solar photovoltaic power plants. This facility will be used to fund solar projects in the United States. Also in 2010, SunEdison signed an agreement with JPMorgan Capital Corporation to fund an estimated $60 million in project financing for SunEdison deployments across key markets in the United States. In May 2010, SunEdison entered into an agreement with First Reserve to establish an entity to provide for the purchase of solar photovoltaic energy projects developed by SunEdison. Each of SunEdison and First Reserve have agreed to make capital commitments to the partnership. The initial equity commitment of up to $167 million for the entity will be contributed by First Reserve and SunEdison over time in proportion to each partys ownership interest of 90.1% and 9.9%, respectively. Solar photovoltaic energy projects are planned to be sold to the First Reserve Partnership based on acceptance by the entity. In addition, SunEdison may enter into separate operations and maintenance agreements with the First Reserve Partnership related to the projects. SunEdison has invested $8.0 million in the entity as of December 31, 2010.

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