REC Silicon — Interim / Quarterly Report 2010

Apr 28, 2010

REC

FIRST QUARTER 2010

RENEWABLE ENERGY CORPORATION ASA
April 28, 2010

REPORT

---

THE WORLD'S MOST
INTEGRATED SOLAR
ENERGY COMPANY

---

HIGHLIGHTS

• Revenue growth of 22 percent
• NOK 2,360 million versus NOK 1,936 million in the first quarter 2009
• Improved overall volume demand although continued price pressure
• Operating results negatively affected by reduced sales prices, expansion and ramp-up costs and increased depreciation on assets taken in use
• EBITDA NOK 415 million versus NOK 510 million in the first quarter 2009
• EBIT NOK -125 million versus NOK 298 million in the first quarter 2009
• First modules shipped from Singapore - promising operational results from the initial phase of wafer, cell and module production
• The “REC Peak Energy Module” was launched at a well attended customer event at the Singapore plant on April 22, 2010.
• Securing long-term funding through fully underwritten gross NOK 4 billion rights issue and approximately NOK 10 billion in new credit and guarantee facilities to replace existing bank facilities.

FINANCIAL REVIEW

KEY FINANCIALS - REC GROUP

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31
			2009	Q4 2009
Revenues	2 360	1 936	8 831	2 545
EBITDA	415	510	1 803	595
EBITDA – margin	18 %	26 %	20 %	23 %
EBITDA excluding junction box expenses	415	512	2 167	620
EBIT	-125	298	-829	-1 121
EBIT – margin	nm	15 %	nm	nm
Net financial items	855	351	-472	257
Profit/loss before tax	730	650	-1 301	-864
Income tax expense/benefit	-326	-215	100	143
Profit/loss for the period from continuing operations	404	435	-1 200	-721
Profit/loss for the period from discontinued operations	-58	-41	-1 146	-327
Profit/loss for the period from total operations	346	394	-2 347	-1 048
Earnings per share from continuing operations (in NOK)
- basic	0.61	0.77	-1.95	-1.08
- diluted	-0.01	0.77	-1.95	-1.08
Expansion costs	32	98	315	73
EBITDA adjusted for expansion costs	447	607	2 118	667
Adjusted EBITDA – margin	19 %	31 %	24 %	26 %

Note: Due to reporting Sovello as discontinued operations from the first quarter 2010, most line items in the statement of income have been re-presented for previous periods.

---

REC First Quarter 2010

REVENUES AND EBITDA

Overall revenue amounted to NOK 2,360 million in the first quarter 2010, which was an increase of 22 percent from the first quarter 2009. The revenue growth was 31 percent on a constant currency basis.

The revenue growth is driven by higher production and sales volumes in all three business segments. As expected, average selling prices declined, most notably due to amendments made to the wafer contracts. Declining selling prices is the main explanation for the revenue decline of seven percent from the fourth quarter 2009.

EBITDA was NOK 415 million in the first quarter. The lower EBITDA compared to fourth quarter mainly relates to lower average wafer prices, as well as costs related to the commissioning and ramp-up of new production facilities.

Expansion costs relating to assets not yet in commercial phase amounted to NOK 32 million, compared to NOK 98 million in the first quarter 2009 and NOK 73 million in the fourth quarter 2009.

DEPRECIATION, AMORTIZATION AND IMPAIRMENT

Depreciation, amortization and impairment amounted to NOK 540 million in the first quarter 2010, up from NOK 211 million in the first quarter 2009.

The increase in depreciation and amortization primarily reflects the expansion programs. During the first quarter, depreciation commenced on parts of the assets in the Singapore operations.

Depreciation and amortization are expected to continue to increase as assets currently under construction are being put to their intended use.

EBIT

EBIT was a negative NOK 125 million in the first quarter 2010, compared to a positive NOK 298 million in the first quarter 2009. In the fourth quarter 2009, REC reported negative EBIT of NOK 1,121 million, including NOK 1,302 million in impairments.

NET FINANCIAL ITEMS

In connection with the committed term sheet agreement for the fully underwritten credit and guarantee facilities of NOK 10 billion as of March 30, 2010 REC is required to terminate its two existing bank loan agreements. This is expected to be done in the second quarter. As a consequence, REC at March 31, 2010 expensed the major part of the remaining previously paid up-front/waiver fees and costs relating to the existing bank facilities, amounting to NOK 334 million.

Interest expenses increased in the first quarter 2010 compared to the first quarter 2009, as a result of increased interest bearing liabilities and increased borrowing costs.

Capitalized borrowing costs in the first quarter 2010 are related to qualifying assets under construction in Singapore and the US.

Currency gains in the first quarter 2010 were primarily related to gains on USD loans from REC ASA to REC Silicon and gains on EUR bank debt, which were partially offset by currency losses on SGD debt.

During the first quarter 2010, NOK weakened against SGD and USD but strengthened against EUR. This gave rise to gains on currency derivatives for the sale of EUR and purchase of SGD and USD, of which the latter relates to embedded derivatives.

The estimated fair value of the EUR 320 million convertible bond decreased from NOK 2,816 million at December 31, 2009 to NOK 2,261 million at March 31, 2010, and REC recognized a gain of NOK 555 million in the first quarter 2010. NOK 464 million of this is reported as fair value adjustment of convertible bond and NOK 91 million as currency gain. The decrease in estimated fair value of the bond in EUR during the quarter is primarily related to the option element of the bond.

INCOME TAX

REC has estimated income taxes of NOK 326 million for the first quarter 2010.

As mentioned in note 18 to the consolidated financial statements for 2009, the Singapore operations will generate deferred tax liabilities when depreciation of property, plant and equipment commences on assets with expected useful lives that exceed the tax-free period in Singapore. Deferred taxes of NOK 110 million have been estimated and recognized for assets in Singapore for which depreciation started in the quarter.

It should also be assumed that the REC Group in subsequent periods will recognize deferred tax liabilities on prepayments of parts of royalties from the Singapore operations expected to be made in subsequent periods.

PROFIT/LOSS AFTER TAX FROM CONTINUING OPERATIONS

Profit after tax from continuing operations amounted to NOK 404 million in the first quarter 2010, compared to a profit of NOK 435 million in the first quarter 2009 and a loss of NOK 721

FINANCIAL ITEMS - REC GROUP

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31 2009	Q4 2009
Share of loss of associates	1	-4	-64	-52
Financial income	4	4	95	48
Financial expenses	-618	-89	-874	-390
Capitalized borrowing cost	115	87	549	173
Net financial expenses	-503	-2	-325	-217
Net currency gains/losses	431	150	-254	50
Net gains/losses embedded derivatives	55	-724	-2 997	111
Net gains/losses other derivatives	402	928	3 229	472
Net gains/losses derivatives	457	204	232	583
Fair value adjustment convertible bonds	464	0	-156	-156
Net financial items	855	351	-472	257

4

---

million in the fourth quarter 2009. Basic EPS from continuing operations for the first quarter was NOK 0.61, compared to NOK 0.77 in the first quarter 2009 and a negative NOK 1.08 in the fourth quarter 2009.

Diluted EPS differs from basic EPS in the first quarter 2010, due to the convertible bond. The convertible bond has a dilutive effect if EPS is reduced when adjusting for all effects on earnings and assuming the bond was converted to shares in full at the beginning of the period (or when it was issued in relation to 2009). Effects on earnings are interest expenses, currency and fair value gains or losses and estimated deferred income taxes. The total number of shares that could be issued by conversion of the bond are 49.3 million. If the effect of adjusting for the bond increases EPS, it is anti-dilutive, and is then not included in diluted EPS.

Consequently, diluted EPS from continuing operations in the first quarter 2010 was a negative NOK 0.01.

LOSS FROM DISCONTINUED OPERATIONS

Loss from discontinued operations relates to the sale Sovello and amounted to NOK 58 million in the first quarter 2010. The substantial loss for the year 2009 from discontinued operations primarily related to impairment of assets in Sovello. Other negative results from Sovello as well as recognition of provision for losses on guarantees and undertakings and currency losses on shareholder loans in REC ASA also contributed negatively in 2009.

See below for further information about discontinued operations.

PROFIT/LOSS FROM TOTAL OPERATIONS

Profit after tax from total operations amounted to NOK 346 million in the first quarter 2010, compared to a profit of NOK 394 million in the first quarter 2009, and a loss of NOK 1,048 million in the fourth quarter 2009. Basic EPS from total operations for the first quarter was NOK 0.52, compared to NOK 0.69 in the first quarter 2009 and a negative NOK 1.58 in the fourth quarter 2009.

Diluted EPS differs from basic EPS in the first quarter 2010, due to the convertible bond. Diluted EPS from total operations in the first quarter 2010 was a negative NOK 0.09.

The EPS for first quarter 2009 has been adjusted for the rights issue in June/July 2009.

OPERATIONAL REVIEW

MARKET DEVELOPMENT AND CONTRACT UPDATE

The PV solar industry saw clear signs of improved demand towards the end of 2009, and Solarbuzz estimates that global demand for the full year reached 7.3 GW. The demand continued to be high in the first quarter of 2010.

The demand growth reflects a more stable economic environment and continued high returns on PV system investments after the decline in module prices last year. So far this year module prices have decreased only slightly, in line with the expectation that prices would decline at a slower pace in 2010 than in 2009.

REC evaluates that the main uncertainty in the PV market for the remainder of the year relates to the effects of changes in solar energy policies and incentive schemes in key markets, most notably in Germany. The proposed reductions in feed-in tariffs in Germany are expected to dampen demand in the second half of the year, although the return on investments in PV systems will remain attractive also after the feed-in tariff reductions. Other important markets are expected to see continued growth also in the second half of the year, including Italy, US, Japan, Czech Republic, China, and the Benelux region. Although the estimate range remains wide, industry analysts seem to have increased their demand estimates for 2010 towards 10 GW.

In the first quarter 2010, REC Solar's average module prices were approximately 15 percent below the 2009 average and approximately four percent below the previous quarter.

The demand for wafers increased in the first quarter. Customers remain focused on product quality, and apply strict quality assessment criteria on the wafers. Although observable market prices have been fairly stable in the first quarter, REC Wafer average selling prices was negatively affected by the previously communicated amendments made in the long-term wafer contracts.

The average wafer price obtained for the first quarter 2010 was approximately 30 percent below the 2009 average and approximately 16 percent below the average prices obtained in the previous quarter. Due to the market developments, REC Wafer in 2009 agreed to contract adjustments for most of its long term wafer customers for the second half of 2009. REC has negotiated, and is in the process of negotiating adjustments also with respect to 2010. Please see also section 'Principle Risks and Uncertainties'.

Average polysilicon selling prices in the first quarter were approximately 24 percent below the 2009 average and approximately 14 percent below the previous quarter.

REC Silicon has made certain amendments to its long-term supply contracts, in particular for supply of solar grade silicon material, but also for polysilicon for float zone applications and for deliveries to the semiconductor industry. As earlier communicated, silane sales in the first half of the year are expected to be negatively affected by seasonality and customer inventory adjustments, even though REC's silane sales, and the silane market, are expected to grow from 2009 to 2010.

EXPANSION PROJECTS UNDER EXECUTION

Silicon IV: The new silane gas plant Silicon IV in Moses Lake is nearing completion, and will provide additional silane for the Silicon III FBR reactors and new silane loading facilities for the Silicon III/IV complex. Mechanical completion is on schedule for the second quarter.

Commercial start-up of the plant is scheduled for mid 2010, with a planned ramp-up schedule aligned with the general market development.

Glomfjord mono plant: REC Wafer's monocrystalline ingot and wafer plant in Glomfjord is continuing ramp-up according to plan.

Singapore: The commissioning and production start-up in Singapore has run well. Production of solar cells commenced on

---

the first of a total eight production lines in January, and three more lines have since been started up. The first of a total four production lines for solar modules was started up in February. Installation and commissioning of the other cell and module lines is expected to follow over the next quarters.

The company also started initial production of wafers in March 2010. The ramp-up of wafer production will be aligned to market demand.

All construction works have now been completed with good safety performance. Project costs continue to trend according to previously communicated forecasts.

Overall, the Singapore project is expected to increase REC's total nameplate wafer capacity to approximately 2.4 GW and nameplate solar cell and module capacity to more than 700 MW when fully up and running in 2011.

SEGMENT INFORMATION

REC SILICON

REC Silicon produces polysilicon and silane gas for the photovoltaic industry and the electronics industry at plants in Moses Lake, Washington and in Butte, Montana. REC Silicon's polysilicon production capacity is expected to almost triple from 2008 to 2011. REC Silicon employs more than 775 people.

REC Silicon reported revenue of NOK 967 million in the first quarter 2010, an increase of two percent from the first quarter 2009 but a decline of 14 percent from the previous quarter. Measured in USD, revenue increased 20 percent year-on-year and declined 15 percent from the previous quarter.

The revenue increase from the first quarter 2009 is primarily driven by increased production and sales of granular polysilicon at Silicon III. Compared to the fourth quarter 2009, the effect of higher production and sales of polysilicon was offset by lower average selling prices and reduced sales of silane gas.

Average USD selling prices for polysilicon in the first quarter were approximately 24 percent below the 2009 average and approximately 14 percent lower than in the fourth quarter. The primary reasons for the lower average selling prices were downward pressure on the market price for solar grade polysilicon, changes in product mix, and price discounts on lower grade polysilicon material. Overall sales volume of material of all grades was 3,177 MT in the first quarter, an increase of 82 percent from the first quarter 2009 and 22 percent from the fourth quarter 2009.

Total production of polysilicon increased by 89 percent from the first quarter 2009 to 3,322 MT in the first quarter 2010, of which 2,441 MT solar- and electronic grade polysilicon. The increase is explained by Silicon III, where production increased to 1,721 MT including lower grade polysilicon material.

Approximately 58 percent of the solar grade polysilicon volume sold in the first quarter was sold to REC companies, which includes one third of the deliveries to Sovello. In fourth quarter 2009, internal sales accounted for 75 percent of solar grade polysilicon sales. The reduction is explained by increased shipments of polysilicon from Silicon III to third party customers.

Silane gas sales were 275 MT in the first quarter, which was a decline of 25 percent from the first quarter 2009 and 64 percent below the previous quarter. As earlier communicated, silane sales in the first half of the year are expected to be negatively affected by seasonality and customer inventory adjustments, in particular in the first quarter.

REC Silicon EBITDA was NOK 452 million in the first quarter 2010, which was in line with the first quarter 2009 but 21 percent below the previous quarter. The EBITDA margin of 47 percent was unchanged from the first quarter 2009 and down from 51 percent in the fourth quarter 2009.

The sequential EBITDA and margin decline is mainly explained by lower sales of silane gas, and the lower average selling prices for polysilicon, although this was partly offset by reduced average production costs.

REC Silicon expansion costs in the first quarter 2010 where NOK 14 million, whereas expansion costs were NOK five million in the first quarter 2009 and NOK six million in the fourth quarter 2009.

Currency translation effects negatively affected the first quarter EBITDA by NOK 78 million compared to the first quarter 2009. On a constant currency basis, and adjusted for expansion costs, REC Silicon EBITDA increased by approximately 20 percent compared to the first quarter 2009.

REC WAFER

REC Wafer produces mono- and multicrystalline ingots and wafers for the solar cell industry at three sites, in Glomfjord and Herøya in Norway, and in Singapore. REC Wafer employs approximately 1,150 people, and is expected to increase capacity to 2.4 GW.

REC Wafer reported revenue of NOK 1,571 million in the first quarter 2010, which was a decline of one percent from both the first quarter 2009 and the previous quarter.

FINANCIAL HIGHLIGHTS - REC SILICON

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31 2009	Q4 2009
Revenues	967	947	3 943	1 130
EBITDA	452	450	1 920	574
EBITDA – margin	47 %	47 %	49 %	51 %
Expansion costs	14	5	25	6
EBITDA adjusted for expansion costs	466	455	1 944	580
Adjusted EBITDA – margin	48 %	48 %	49 %	51 %
Polysilicon production in MT (solar- and electronic grade)	2 441	1 657	7 023	2 125
Polysilicon sale in MT (all grades)	3 177	1 750	7 753	2 614
Silane gas sale in MT	275	366	2 187	755

---

The revenue decline reflects that price adjustments in the long-term wafer contracts more than offset the effect of higher production and sales volumes. Average selling prices were approximately 16 percent below the previous quarter and approximately 30 percent below the 2009 average. As earlier communicated, the significant price reduction is reflecting adjustments of the long term wafer contracts. Due to remaining price effects of the long term contracts, the average selling prices for the first quarter were somewhat higher than anticipated and indicated in the interim report for the fourth quarter.

Production reached 287 MW in the first quarter, which was an increase of 50 percent from the first quarter 2009 and an increase of 16 percent from the previous quarter. Wafer sales volumes increased in line with production, to 284 MW in the first quarter 2010.

The new mono facility in Glomfjord accounted for 16 MW of six inch wafer production. The old mono pullers in Glomfjord were not in production in the first quarter, due to low demand for five inch mono wafers.

EBITDA was a negative NOK 13 million in the first quarter 2010, compared to a positive NOK 242 million in the first quarter 2009 and NOK 351 million in the fourth quarter 2009. The sharp decline is explained by the significantly lower average selling prices, and higher ramp-up and expansion cost compared to previous quarter.

Herøya III and IV still have a negative effect on the average margin. The negative EBITDA contribution from the new mono plant in Glomfjord increased to approximately NOK 85 million from approximately NOK 40 million in the previous quarter, due to ramp-up costs, no production at the old mono pullers, and lower average selling prices. The ramp-up of the Singapore plant contributed approximately NOK 18 million negatively to EBITDA in March.

Expansion costs amounted to NOK 17 million in the first quarter 2010, which mainly relates to preparations for the start of commercial wafer production in Singapore. This compares to expansion costs of NOK 64 million in the first quarter 2009 and NOK 24 million in the fourth quarter 2009.

Product quality has become an increasingly important competitive factor in the market. To meet the customers' stricter quality requirements, REC Wafer has already made several improvements in both mechanical quality and solar efficiency of the wafers and will continue its improvement programs in the quarters to come. Some of the quality improvement measures taken will have a negative effect on productivity and costs in the short term.

REC SOLAR

REC Solar produces solar cells and solar modules and engage in project developments in selected segments of PV systems. Total installed production capacity is 180 MW for solar cells in Norway and 150 MW for solar modules in Sweden. The ongoing expansion in Singapore is expected to add more than 550 MW of production capacity for solar cells and modules during 2010. REC Solar employs approximately 1,450 people.

REC Solar reported revenue of NOK 567 million in the first quarter 2010, which was an increase of 46 percent from the first quarter 2009 and four percent above the previous quarter.

The increase in revenue from the first quarter 2009 reflects significantly higher sales of modules manufactured in Sweden. In addition, the first modules manufactured in Singapore were delivered to customers. The volume increase more than offset lower average selling prices.

Module sales amounted to 43 MW, an increase of 169 percent from the first quarter 2009 and 16 percent above the previous quarter. The average selling price in the first quarter was approximately 15 percent below the 2009 average and approximately four percent below the previous quarter.

Module production amounted to 48 MW in the first quarter, including 11 MW in Singapore. Solar cell production was 67 MW, including 24 MW in Singapore. The overall module inventory increased by 4 MW to 17 MW, with the inventory mainly consisting of modules in transit from the plant in Singapore and modules utilized in the junction box repair project.

EBITDA was a negative NOK 107 million in the first quarter 2010. Approximately NOK 39 million of this was negative EBITDA contribution attributable to ramp-up of the Singapore plant.

As earlier communicated, the Scandinavian operations were expected to continue to contribute negatively to EBITDA. However, the company is beginning to see positive effects of cost measures implemented during 2009 and the solar cell operation in Norway contributed positively to EBITDA in the first quarter.

FINANCIAL HIGHLIGHTS - REC WAFER

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31 2009	Q4 2009
Revenues	1 571	1 589	5 858	1 590
EBITDA	-13	242	990	351
EBITDA – margin	nm	15 %	17 %	22 %
Expansion costs	17	64	155	24
EBITDA adjusted for expansion costs	4	306	1 145	375
Adjusted EBITDA – margin	0 %	19 %	20 %	24 %
Multi production in MW (at 15.0% cell efficiency)	272	181	758	230
Mono production in MW (at 20.0% cell efficiency)	16	10	59	17
Total production in MW	287	191	818	248
Multi sale in MW (at 15.0% cell efficiency)	271	182	737	226
Mono sale in MW (at 20.0% cell efficiency)	14	5	30	12
Total sale in MW	284	187	767	238

---

REI First Quarter 2010
8

FINANCIAL HIGHLIGHTS - REC SOLAR

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31 2009	Q4 2009
Revenues	567	388	1 881	543
EBITDA	–107	2	–1 001	–219
EBITDA – margin	nm	1 %	nm	nm
EBITDA excluding junction box expenses	–107	4	–637	–194
Expansion costs	0	25	122	40
EBITDA adjusted for expansion costs	–107	27	–879	–179
Adjusted EBITDA – margin	nm	7 %	nm	nm
Module production in MW	48	27	115	39
Contract manufacturing MW	0	0	6	6
External cell sale in MW	5	1	17	5
Module sale in MW	43	16	110	37

The first production lines for solar cells and modules that have been put into operation in Singapore have performed well with respect to production volume, yield, and efficiency, as well as operational costs.

Increased sales, good operational performance during the start-up in Singapore, and improved operational performance in the Scandinavian units resulted in lower EBITDA loss compared to the previous quarter.

In preparation for the increased sales volume from the new plant in Singapore, REC Solar continues to develop its market position through a broadening of its customer base, strengthening of its presence in key markets, introduction of partner programs, brand building activities, and product development initiatives. The "REC Peak Energy Module" was launched at a well attended customer event at the Singapore plant on April 22, 2010. The new module design includes three bus bars and improved contacting that improves electrical current, resulting in an average power gain of nine watts per module.

SOVELLO (DIVESTED)

The three equal partners REC, Evergreen and Q-Cells on March 24, 2010 entered into an agreement to sell 100 percent of its shares and shareholder loans to a company controlled by Ventizz Capital Fund IV, L.P. The transaction was closed on April 22, 2010.

Note that Sovello is presented as a part of discontinued operations from the first quarter 2010, and revenues and EBITDA in the table below are not included in total revenues and EBITDA for the REC Group. See the section "Discontinued operations and assets held for sale" below for more information.

REC ASA AND REC SITE SERVICES

REC ASA is a holding company comprising parts of Group Management, corporate functions, corporate R&D, a corporate project management organization, and REC Group's in-house bank.

REC Site Services Pte Ltd in Singapore was set up to provide on-site project management services during the construction period, and facility management services during operations. REC Site Services Pte Ltd sold facility services to the operating units (Wafer, Cells and Modules) in the first quarter, with a small margin on the EBIT level.

ELIMINATIONS - REC GROUP

Elimination of internal profit depends on internal sales volumes and price, cost of production and intercompany inventory changes.

Eliminations should generally be expected to affect EBITDA negatively as the company grows across the value chain. The positive EBITDA effect in the first quarter 2010 was primarily due to reduced internal sales prices.

TECHNOLOGY DEVELOPMENT AND R&D

REC incurred R&D expenses of NOK 76 million in the first quarter 2010, compared to NOK 69 million in the first quarter 2009 and NOK 87 million in the fourth quarter 2009.

The main focus of REC Silicon's technology team has remained on increasing the reliability of the Silicon III's silane plant and preparations for the commissioning of Silicon IV in the first quarter 2010. However, this work is clearly diminishing in volume, and good progress has also been made on the work to capture the silicon byproducts from the FBR reactor and on upgrading them to high quality polysilicon.

REC's wafer technology development has made progress in developing solutions to factors impacting the mechanical quality of wafers. This will contribute to increasing yields in both wafer and solar cell manufacturing. Furthermore, comprehensive and focused development efforts addressing improvement potentials in the silicon crystallization process are stepwise resulting in wafer products with improved solar cell performance. Significant resources are also being used to optimize the use of fluidized bed reactor polysilicon from REC Silicon III in the REC Wafer production process.

The solar cell production lines currently under ramp-up in Singapore include new capabilities to increase the average conversion efficiency for solar cells beyond 16 percent, and to improve yield. During the first quarter, both a high yield and the capability to reach this first efficiency milestone were demonstrated in full, industrial scale. However, REC Solar expects that there is still substantial potential for improvement both in the short and medium term. To this end, REC Solar is working in close cooperation with equipment and material suppliers as well as external research and development institutes.

---

9
MEC First Quarter 2010

FINANCIAL HIGHLIGHTS - SOVELLO

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31 2009	Q4 2009
Revenues	114	77	325	131
EBITDA	1	18	-62	-28
EBITDA – margin	1 %	23 %	nm	nm

Note: Figures in the table refer to proportionate consolidation of REC's 33.3 percent ownership. Production in MW is calculated on a 100 percent basis.

FINANCIAL HIGHLIGHTS - REC ASA & REC SITE SERVICES

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31 2009	Q4 2009
Revenues	28	16	76	25
EBITDA	6	-39	-151	-32
Expansion costs	1	4	14	3

ELIMINATIONS - REC GROUP

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31 2009	Q4 2009
Elimination revenues	-772	-1 004	-2 924	-741
Elimination EBITDA	78	-144	44	-80

STATEMENT OF FINANCIAL POSITION AND CASH FLOW

The developments in the statement of financial position during the first quarter 2010 primarily reflect a continued high level of capital expenditure and the related funding.

At March 31, 2010, assets and liabilities relating to Sovello that are held for sale are presented as a one line item under assets and one line item under liabilities.

In January 2010, REC Silicon received confirmation that it had been awarded Recovery Act Advanced Energy Manufacturing Tax Credits of up to 30 percent of the qualifying expenditures made after February 17, 2009 on Silicon III and IV, maximized to USD 155 million. In the first quarter 2010, REC Silicon recognized USD 102 million as a reduction to capital expenditure (government grants - reduction to cost price of fixed assets) in the statement of financial position and a corresponding non-current receivable. Some future conditions must be fulfilled to receive the grants, including that awardees have three years from the date of certification to complete and place in service projects certified under the program. The vehicle for receiving benefits under this program is a credit claimed on the US-company's annual tax return, subject to the limitations of alternative minimum tax. Unused portions of the credit can be carried forward 20 years and used to offset income tax during those periods subject to similar limitations. Any unused portions after 20 years are void.

EQUITY AND DEBT

Equity amounted to NOK 17.5 billion at March 31, 2010, compared to NOK 16.9 billion at the end of 2009. Comprehensive income was a positive NOK 565 million in the first quarter, reflecting mainly the profit for the period and currency translation differences. The equity ratio was more or less unchanged at 49 percent.

Net debt was NOK 11.6 billion at March 31, 2010, an increase of NOK 1.8 billion from the end of 2009. These figures include convertible bond but exclude net debt of Sovello, restricted bank accounts and prepayments on which interest is calculated. NOK 0.5 billion in additional finance lease liabilities were recognized in connection with commencement of the third slurry capacity lease contract in REC Wafer in Glomfjord. See also "Financial items" above regarding the convertible bond and upfront fees.

On March 30, the company signed a committed term sheet with DnBNOR, Nordea and SEB for new fully underwritten credit and guarantee facilities of NOK 10 billion. The new bank facilities require cancellation and repayment of existing debt under two existing credit facilities and a guarantee facility. The facilities agreement is expected to be signed during May 2010. As a result of this, all bank debt has been classified as current at March 31, 2010.

CASH FLOW

Net cash flow from operating activities was NOK 202 million in the first quarter 2010, compared to NOK 0 million in the first quarter 2009 and NOK 820 million in the fourth quarter 2009. The improvement compared to the first quarter 2009 was positively affected by financial items and income taxes paid. The net cash flow from operating activities reflects increase in working capital in the first quarter of both years.

Financial items contributed positively in the first quarter 2010, as interest paid was more than offset by currency gains and realization of currency derivatives. It should be noted that the positive cash flow in the fourth quarter 2009 included a net positive cash effect for financial items due to realization of currency derivatives.

Net cash flow from investing activities was NOK -1,709 million in the first quarter, compared to NOK -2,734 million in the first quarter 2009 and NOK -2,117 million in the fourth quarter 2009. Payments for property, plant and equipment, and intangible assets amounted to NOK 1,776 million in the first quarter 2010, whereas the company received government grants of NOK 66 million.

---

The split of payments between segments is outlined in the table below.

The differences between additions and payments for property, plant and equipment, and intangible assets primarily relate to changes in pre-payments, accruals and payables for capital expenditure, and currency developments.

Net cash flow from financing activities was NOK 965 million in the first quarter, compared to NOK 4,241 million in the first quarter 2009 and NOK -138 million in the fourth quarter 2009.

CONTRACTUAL COMMITMENTS

Please see note 29 to the consolidated financial statements for 2009. Estimated contractual purchase obligations amounted to NOK 4.1 billion for goods and services at March 31, 2010, of which NOK 1.1 billion is estimated to be paid during the remainder of 2010. In addition, committed future minimum payments under operating leases were estimated to NOK 0.7 billion at March 31, 2010.

Estimated contractual obligations for capital expenditure (excluding capitalization of borrowing costs) were NOK 1.8 billion at March 31, 2010, of which NOK 1.7 billion is estimated to be paid during the remainder of 2010. In addition, REC had approved but not committed estimated capital expenditure of NOK 1.2 billion, of which NOK 1.1 billion is expected to be paid during the remainder of 2010. The amounts measured in NOK are translated at March 31, 2010 exchange rates, and changes in NOK versus the main currencies USD, SGD and EUR will affect the actual expenditures measured in NOK.

EVENTS AFTER THE REPORTING DATE

The sale of the shares in Sovello to a company controlled by Ventizz Capital Fund IV, L.P. was closed on April 22, 2010. REC Silicon will continue to supply polysilicon to Sovello, but with reduced annual volumes.

The new credit and guarantee facilities agreement described under equity and debt are contingent upon REC raising new equity of gross NOK 4 billion. On April 6, 2010, the company invited to an extraordinary general meeting to be held on April 29, 2010 to decide on the already fully underwritten gross NOK 4 billion rights issue. The rights issue is expected to be completed during the second quarter 2010.

TRANSACTIONS WITH RELATED PARTIES

During the first quarter 2010, the nature of transactions with related parties have primarily been as described in note 10 to the consolidated financial statements for 2009.

The below amounts in NOK are calculated at average exchange rates for profit or loss items and at quarter end exchange rates for items in the statement of financial position.

In the first quarter 2010, the owners of Sovello entered into an agreement to sell all the Sovello shares and shareholders loans. The acquirer is a fund under the management of Ventizz Capital Partners. The transaction was closed on April 22, 2010. No consideration was paid for the shares and shareholders loans.

In the first quarter 2010, REC ASA made payments to the Sovello banks under the guarantee and undertakings, which reduced the provisions made at December 31, 2009 from NOK 90 million (EUR 10.8 million) to NOK 16 million (EUR 2 million) at March 31, 2010, that was paid at the closing of the transaction.

Sovello accrued interest of NOK 7 million (EUR 1 million) on the loans to REC ASA during the first quarter 2010. At March 31, 2010 REC ASA had receivables of NOK 470 million (EUR 59 million) on Sovello.

In the first quarter 2010, REC Silicon recognized revenues of NOK 52 million (USD 9 million) from sales of polysilicon to Sovello, of which NOK 24 million (USD 4 million) reduced

PROPERTY, PLANT AND EQUIPMENT

(NOK IN MILLION)	REC Silicon	REC Wafer	REC Solar	Other	REC Group
Carrying value at January 1, 2010	11 800	6 851	2 971	2 777	24 398
Translation differences	410	68	-89	95	484
Net additions*	-294	1 285	727	-67	1 651
Depreciation	-182	-207	-84	-31	-504
Impairment	0	0	0	0	0
Carrying value at December 31, 2010	11 734	7 997	3 524	2 774	26 029

INTANGIBLE ASSETS

(NOK IN MILLION)	REC Silicon	REC Wafer	REC Solar	Other	REC Group
Carrying value at January 1, 2010	517	416	39	88	1 060
Translation differences	19	0	0	1	20
Net additions*	15	1	4	57	77
Amortization**	-6	-7	-1	-7	-21
Impairment	0	0	-13	0	-13
Carrying value at December 31, 2010	545	410	29	140	1 123
Payments of PP&E and intangibles*	511	476	628	94	1 710

• net of investment grants
  ** Amortization in the income statement includes amortization of prepaid lease of 1 million NOK, which is not included in the table above.

---

prepayments and sign-on fees. At March 31, 2010, no prepayments were remaining and NOK 229 million (USD 38 million) of the sign-on fees were still not amortized to income. In addition, REC Silicon has for accounting purposes calculated interest on prepayments and sign-on fees. At March 31, 2010, REC Silicon had receivables of NOK 29 million (USD 5 million) on Sovello.

In the first quarter 2010, REC Solar sold modules for NOK 57 million to AEE Solar Inc., a subsidiary of Mainstream Energy Inc., and had receivables of NOK 82 million at March 31, 2010. In the first quarter 2010, REC Wafer made purchases of NOK 4 million from, and had NOK 1 million accounts payable at March 31, 2010 to, Meløy Bedriftsservice AS.

PRINCIPAL RISKS AND UNCERTAINTIES

The REC Group's activities expose it to a variety of market and operational risks factors, as well as financial risk factors. Please refer to REC's Annual Report for 2009 for a description of these risk factors. Reference is also made to the prospectus for the rights issue in 2009. The prospectus for the rights issue in May 2010 will in addition address updated risks factors.

This report contains statements regarding the future in connection with REC's growth initiatives, revenue and profit figures, outlook, strategies and objectives. All such statements are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.

A tougher economic climate adversely affected the company's markets in 2009 and into 2010, which was reflected in REC's value assessments of future cash flows and asset values in the financial statements at December 31, 2009. Further adverse economic developments could potentially have significant negative effects on REC's financial results and financial position.

Due to the market developments, REC Wafer in 2009 agreed to contract adjustments for most of its long term wafer customers for the second half of 2009. REC is in the process of negotiating adjustments also with respect to 2010. As earlier communicated, REC Wafer is involved in legal proceedings after having called upon bank guarantees with respect to two customers. Going forward, legal proceedings should be expected if REC Wafer and the customers do not succeed in finding commercial solutions acceptable to both parties. On this basis, it is likely that REC Wafer in the near future will institute legal proceedings towards certain customers in order to enforce the contracts. REC Wafer may also be involved in proceedings from customers alleging breach of contract, including product defects. Any such legal proceedings encounter procedural risk and may take time to resolve.

REC First Quarter 2010
11

---

12
REC First Quarter 2010

OUTLOOK

The PV solar industry saw clear signs of improved demand towards the end of 2009, and this trend has strengthened in the first quarter of 2010. The demand growth reflects a more stable economic environment and continued high returns on PV system investments after the decline in module prices last year.

REC evaluates that the main uncertainty in the PV market for the remainder of the year relates to the effects of changes in renewable policies and solar energy incentive schemes in key markets, most notably in Germany.

REC Solar's average selling prices should in broad terms be expected to follow the general price developments in the market, and prices are not expected to change significantly from the first to the second quarter 2010.

REC Solar was producing cells and modules at close to full capacity in the Scandinavian operations in the first quarter 2010. The start-up and ramp-up of the first production lines in Singapore progress as planned and overall cell and module production is thus expected to increase in the second quarter.

The increased production capacity could enable REC Solar to increase module production in 2010 almost fourfold compared to 2009. However, actual cell and module production will be aligned with the overall market conditions and product demand.

REC Wafer expects average selling prices in the second quarter to decline slightly from the first quarter. The company expects to sell all its planned second quarter production in the quarter.

Wafer production increased in the first quarter, with higher capacity utilization at Herøya III/IV, commercial start-up of the new mono plant in Glomfjord, and initial production in Singapore. Production is expected to increase further in the second quarter based on further ramp-up of the Singapore plant and the mono plant in Glomfjord. REC expects increased negative impact on EBITDA from continued ramp-up of the new Singapore plant and the cost of the quality improvement measures to be implemented at existing wafer plants.

REC Wafer expects wafer production to increase by approximately 70 percent from 2009 to 2010.

REC Silicon expects the market prices for its products to decrease over the next quarters, and the overall product mix will continue to change with the growing production of granular polysilicon. However, REC Silicon expects average selling prices in the second quarter to be broadly in line with average selling prices in the first quarter.

The production volume of both FBR and Siemens-based polysilicon will in the second quarter be lower due to scheduled maintenance shutdowns of 10 to 21 days at all production facilities. Sales of silane gas are expected to increase significantly from the first to the second quarter.

REC Silicon's annual production volume is expected to increase with the continuing ramp-up of granular polysilicon production from Silicon III in 2010. REC Silicon expects total polysilicon production to reach 12,000 MT in 2010 and increase further to 15,000 MT in 2011 and 17,000 MT in 2012. Silane gas sales to the merchant market are expected to be approximately 2,400 MT in 2010.

The overall EBITDA for the REC Group in the second quarter 2010 is expected to be lower than in the first quarter 2010.

As earlier communicated, approximately 75 percent of the book value of REC's assets where in ramp-up during 2009 and approximately 50 percent will be in ramp-up in 2010. The asset utilization is hence expected to increase steadily during 2010. Based on this the EBITDA is expected to be stronger in the second half of 2010 than in the first half. However the results are highly dependent on market development and further operational improvements.

---

STATEMENTS

BASIS OF PREPARATION

The financial statements are presented in NOK, rounded to the nearest million, unless otherwise stated. As a result of rounding adjustments, the figures in one or more rows or columns included in the financial statements may not add up to the total of that row or column.

STATEMENT OF COMPLIANCE

These condensed consolidated interim financial statements, combined with relevant information in the financial review, have been prepared in accordance with IAS 34. These condensed consolidated interim financial statements have not been audited or subject to a review by the auditor. They do not include all of the information required for full annual financial statements of the Group and should be read in conjunction with the consolidated financial statements for 2009. The consolidated financial statements for 2009 are available upon request from the Company's registered office at Sandvika or at www.recgroup.com.

ACCOUNTING POLICIES

The Group has used the same accounting policies and standards as in the consolidated financial statements as at December 31, 2009. The consolidated financial statements of the REC Group for 2009 were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and the Norwegian Accounting Act.

The new standards, interpretations or amendments to published standards that were effective from January 1, 2010 and that could affect the Group are discussed in note 2.24 to the consolidated financial statements for 2009. In the 2009 financial statements, REC made evaluations that none of these are expected to have significant effect for REC for previous transactions or events.

ESTIMATES AND JUDGMENTS

Preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the REC Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4 to the consolidated annual financial statements for 2009.

FORWARD LOOKING STATEMENTS

This report contains statements regarding the future in connection with REC's growth initiatives, profit figures, outlook, strategies and objectives. In particular, the section "Outlook" contains forward-looking statements regarding the Group's expectations. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements. These factors include the risk factors relating to REC's activities described in REC's Annual Report 2009, including the section Risk Factors in the Report from the Board of Directors. Reference is also made to the prospectus for the rights issue in 2009. The prospectus for the rights issue in May 2010 will in addition address updated risks factors.

Sandvika, April 27, 2010

Board of Directors and CEO

---

CONSOLIDATED STATEMENT OF INCOME REC GROUP

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31 2009
Revenues	2 360	1 936	8 831
Cost of materials	-866	-835	-3 035
Changes in inventories	14	342	35
Employee benefit expenses	-497	-460	-1 649
Other operating expenses	-596	-473	-2 379
EBITDA *	415	510	1 803
Depreciation	-504	-195	-1 218
Amortization	-22	-16	-56
Impairment	-13	-1	-1 359
Total depreciation, amortization and impairment	-540	-211	-2 632
EBIT	-125	298	-829
Share of loss of associates	1	-4	-64
Financial income	4	4	95
Net financial expenses	-503	-2	-325
Net currency gains/losses	431	150	-254
Net gains/losses derivatives and fair value hedge	457	204	232
Fair value adjustment convertible bond	464	0	-156
Net financial items	855	351	-472
Profit/loss before tax	730	650	-1 301
Income tax expense/benefit	-326	-215	100
Profit/loss for the period from continuing operations **	404	435	-1 200
Profit/loss for the period from discontinued operations **	-58	-41	-1 146
Profit/loss for the period from total operations **	346	394	-2 347
Earnings per share for profit attributable to the equity holders of REC ASA (in NOK per share)
From continuing operations
- basic	0,61	0,77	-1,95
- diluted	-0,01	0,77	-1,95
From total operations
- basic	0,52	0,69	-3,81
- diluted	-0,05	0,69	-3,81

• EBITDA includes costs for repair of junction boxes of NOK 2 million in the first quarter 2009 and NOK 364 million for the year 2009.
  ** All profits/losses are attributable to owners of REC ASA.

Amounts in the consolidated statement of income are re-presented for discontinued operations, see below.

---

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME REC GROUP

(NOK IN MILLION)	MAR 31 2009	MAR 31 2009	DEC 31 2009
Profit/loss for the period	346	394	-2 347
Other comprehensive income, net of tax:
Currency translation differences	224	-666	-1 654
Actuarial gain/loss on defined benefit pension schemes	0	0	11
Cash flow hedges	-5	-2	-6
Total other comprehensive income for the period	565	-667	-1 649
Total comprehensive income for the period	565	-274	-3 995
Total comprehensive income for the period attributable to:
Owners of REC ASA	565	-274	-3 995

REC First Quarter 2010
15

---

CONSOLIDATED STATEMENT OF FINANCIAL POSITION REC GROUP

(NOK IN MILLION)	MAR 31 2008	MAR 31 2009	DEC 31 2009
ASSETS
Non-current assets
Goodwill	593	876	584
Other intangible assets	531	490	476
Total intangible assets	1 123	1 366	1 060
Land and buildings	7 163	2 054	2 955
Machinery and equipment	13 383	4 340	10 803
Other tangible assets	216	161	167
Assets under construction	5 266	14 426	10 473
Total property, plant and equipment	26 029	20 981	24 398
Prepaid lease, non-current	33	42	29
Prepaid capex	372	1 550	887
Investments in associates	159	272	146
Other non-current receivables	878	227	195
Embedded derivatives	12	1 861	0
Other derivatives	103	111	110
Restricted bank accounts	91	110	88
Financial assets	1 263	2 581	538
Deferred tax assets	307	50	374
Total non-current assets	29 101	26 570	27 286
Current assets
Inventories	2 111	1 942	1 989
Trade and other receivables	2 605	2 323	2 608
Current tax assets	79	36	64
Embedded derivatives	0	0	0
Other derivatives	553	57	484
Restricted bank accounts	7	9	14
Cash and cash equivalents	1 130	2 003	1 688
Total current assets	8 484	6 370	6 848
Total assets	35 586	32 941	34 134

---

CONSOLIDATED STATEMENT OF FINANCIAL POSITION REC GROUP

(NOK IN MILLION)	MAR 31 2010	MAR 31 2009	DEC 31 2009
EQUITY & LIABILITIES
Shareholders' equity
Share capital	665	494	665
Share premium and other paid in capital	12 764	8 549	12 764
Paid-in capital	19 100	9 043	13 428
Other equity and comprehensive income	4 048	7 196	3 481
Total shareholders' equity	17 410	16 240	16 909
Non-current liabilities
Retirement benefit obligations	66	173	45
Deferred tax liabilities	1 052	980	761
Provisions and other non-interest bearing liabilities	210	128	209
Embedded derivatives	137	0	188
Other derivatives	16	646	25
Non-current financial liabilities, interest bearing	7 241	8 724	11 366
Non-current prepayments, interest calculation	472	560	478
Total non-current liabilities	9 194	11 212	13 072
Current liabilities
Trade payables and other liabilities	3 069	3 088	3 137
Current tax liabilities	132	355	142
Embedded derivatives	58	90	75
Other derivatives	107	357	112
Current financial liabilities interest bearing	5 480	1 393	611
Current prepayments, interest calculation	68	205	76
Total current liabilities	8 515	5 489	4 153
Total liabilities	18 109	16 701	17 225
Total equity and liabilities	35 586	32 941	34 134

17
AEC First Quarter 2010

---

STATEMENT OF CHANGES IN EQUITY REC GROUP

(NOK IN MILLION)	ATTRIBUTABLE TO EQUITY HOLDERS OF REC ASA
	TOTAL PAID IN CAPITAL	OTHER EQUITY	COMPREHENSIVE INCOME	TOTAL
March 31, 2009
At January 1, 2009	9 043	1 075	6 394	16 512
Equity share option plan	0	1	0	1
Total comprehensive income for the period	0	0	-274	-274
At March 31, 2009	9 043	1 076	6 121	16 240
Year 2009
At January 1, 2009	9 043	1 075	6 394	16 512
Equity share option plan	0	8	0	8
Share issue	4 385	0	0	4 385
Total comprehensive income for the period	0	0	-3 995	-3 995
At December 31, 2009	13 428	1 082	2 399	16 909
March 31, 2010
At January 1, 2010	13 428	1 082	2 399	16 909
Equity share option plan	0	1	0	1
Total comprehensive income for the period	0	0	565	565
At March 31, 2010	13 428	1 083	2 964	17 476

REC First Quarter 2010
18

---

CONSOLIDATED DETAILS OF COMPREHENSIVE INCOME REC GROUP

(NOK IN MILLION)	TRANSLATION DIFFERENCES	TAX	PENSION	CASH FLOW HEDGE	ACQUISITION	CHANGE IN ACCOUNTING PRINCIPLE	PROFIT/ LOSS	TOTAL
MARCH 31, 2009
Accumulated at January 1, 2009	1 362	-21	-19	34	234	-50	4 854	6 394
Profit for the period	0	0	0	0	0	0	394	394
Other comprehensive income:
Currency translation differences	-678	12	0	0	0	0	0	-666
Cash flow hedges
- valuation gains/losses taken to equity	0	0	0	-1	0	0	0	-1
- transferred to profit/loss for the period *	0	0	0	-1	0	0	0	-1
Total other comprehensive income for the period	-678	13	0	-2	0	0	0	-667
Total comprehensive income for the period	-678	13	0	-2	0	0	394	-274
Accumulated at March 31, 2009	683	-8	-19	32	234	-50	5 247	6 120
YEAR 2009
Accumulated at January 1, 2009	1 362	-21	-19	34	234	-50	4 854	6 394
Loss for the period	0	0	0	0	0	0	-2 347	-2 347
Other comprehensive income:
Currency translation differences	-1 702	48	0	0	0	0	0	-1 654
Actuarial gain/loss on defined benefit pension schemes	0	-7	19	0	0	0	0	11
Cash flow hedges
- valuation gains/losses taken to equity	0	0	0	2	0	0	0	2
- transferred to profit/loss for the period *	0	3	0	-10	0	0	0	-8
Total other comprehensive income for the period	-1 702	43	19	-8	0	0	0	-1 649
Total comprehensive income for the period	-1 702	43	19	-8	0	0	-2 347	-3 995
Accumulated at December 31, 2009	-341	22	0	26	234	-50	2 507	2 399
MARCH 31, 2010
Accumulated at January 1, 2010	-341	22	0	26	234	-50	2 507	2 399
Profit for the period	0	0	0	0	0	0	346	346
Other comprehensive income:
Currency translation differences	232	-8	0	0	0	0	0	224
Cash flow hedges
- valuation gains/losses taken to equity	0	0	0	1	0	0	0	1
- transferred to profit/loss for the period *	0	2	0	-8	0	0	0	-6
Total other comprehensive income for the period	232	-6	0	-7	0	0	0	219
Total comprehensive income for the period	232	-6	0	-7	0	0	346	565
Accumulated at March 31, 2010	-108	16	0	19	234	-50	2 853	2 964
Total comprehensive income for the period attributable to:
Owners of REC ASA	232	-6	0	-7	0	0	346	565

• Cash flow hedge – transferred to profit/loss for the period affected the following line items in the consolidated statement of income

(NOK IN MILLION)	MAR 31 2010	MAR 31 2009	DEC 31 2009
Revenues	8	1	10
Cost of materials	0	0	0
Total	8	1	10

---

CONSOLIDATED STATEMENT OF CASH FLOW REC GROUP

(NOK IN MILLION)	Q1 2010	Q1 2009	DEC 31 2009
Cash flows from operating activities
Profit/loss before tax including loss from discontinued operations	657	600	-2 482
Income taxes paid	-2	-108	-384
Depreciation, amortization and impairment	546	225	3 565
Fair value adjustment convertible bond	-464	0	156
Associated companies and impairment financial assets	-1	4	64
Changes in receivables and prepayments from customers etc	129	118	-493
Changes in inventories	-219	-337	-462
Changes in payables and accrued expenses	-118	-125	318
Changes in provisions	-110	-4	468
Changes in derivatives	-162	-244	706
Currency effects not cash flow or not related to operating activities	-429	-182	-253
Other items **	375	53	83
Net cash flow from operating activities	202	0	1 286
Cash flows from investing activities
Cash payments for shares (incl associates)	0	0	1
Proceeds from finance receivables and restricted cash	5	2	34
Payments finance receivables and restricted cash	-3	-29	-140
Payments for property, plant and equipment and intangible assets	-1 776	-2 707	-11 136
Proceeds from investment grants	66	0	420
Proceeds from sale of subsidiaries, net of cash sold	0	0	-3
Net cash flow from investing activities	-1 104	-2 734	-10 823
Cash flows from financing activities
Increase in equity	0	0	4 333
Payment of borrowings and up-front/waiver loan fees	-664	-3 516	-17 880
Proceeds from borrowings	1 629	7 757	24 316
Net cash flow from financing activities	966	4 241	10 769
Effect on cash and cash equivalents of changes in foreign exchange rates	18	0	-40
Net increase/decrease in cash and cash equivalents	-524	1 507	1 192
Cash and cash equivalents at beginning of the period *	1 688	497	497
Cash and cash equivalents at the end of the period *	1 165	2 003	1 688

• Cash and cash equivalents excludes restricted bank accounts
  ** Other items in the first quarter 2010 are primarily expensing of up-front/waiver loan fees.

---

DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE REC GROUP

In connection with the sales agreement entered into in the first quarter 2010, Sovello has been classified as held for sale at March 31, 2010 and reported as a discontinued operation in the consolidated financial statements of REC.

Discontinued operations remain consolidated in the consolidated financial statements, with the internal transactions between continued and discontinued operations being eliminated in the consolidation. As a consequence, only income and expense from external transactions are reclassified to discontinued operations.

In addition, the items that will be disposed of in connection with the sale (shareholder loans and remaining provisions for losses on guarantees and undertakings) are also included in assets and liabilities held for sale. The effects of these items on the statement of income (interest income, currency gains, provision for losses and estimated income taxes related to these) are included as a part of discontinued operations in the statement of income. This means that the results presented will not represent the activities of the discontinued operations on a stand-alone basis. Most line items in the statement of income have been re-presented for previous periods.

THE AMOUNTS IN THE STATEMENT OF INCOME FOR DISCONTINUED OPERATIONS

(NOK IN MILLION)	ACCUMULATED 2009				TOTAL MAR 31
	MAR 31	JUN 30	SEP 30	DEC 31
Revenues	77	106	194	325	114
EBITDA	18	-14	-34	-62	1
Depreciation & amortization	-14	-27	-45	-78	0
Impairment	0	0	-672	-855	-6
EBIT	4	-41	-752	-995	-5
Net financial items	-54	-41	-76	-186	-68
Loss before tax	-50	-82	-827	-1 181	-73
Income taxes	9	15	8	35	15
Loss after tax	-41	-67	-819	-1 146	-58

Loss from discontinued operations in the first quarter 2010 amounted to NOK 58 million. Of this, NOK 18 million was the result from Sovello, NOK 7 million was financial items in REC ASA, and NOK 33 million was extra impairment of assets held for sale (NOK 45 million pre-tax and estimated tax benefit of NOK 12 million).

When accounting for the sales transaction in the second quarter 2010, effects of accumulated translation differences and potential further tax effects are expected to be included in the profit or loss from discontinued operations.

REC First Quarter 2010
21

---

THE NET CASH FLOWS OF SOVELLO INCLUDED IN THE PROPORTIONATE CONSOLIDATION IN THE CONSOLIDATED FINANCIAL STATEMENTS OF REC GROUP

(NOK IN MILLION)	ACCUMULATED 2009				2010 MAR 31
	MAR 31	JUN 30	SEP 30	DEC 31
Operating activities	32	46	94	145	-14
Investing activities	-75	-95	-44	-69	-16
Financing activities	66	80	-1	-47	7
Effect on cash of changes in foreign exchange rates	-4	-3	-8	-7	-2
Cash at beginning of period	38	38	38	38	60
Cash at end of period	57	67	79	60	34

THE MAJOR CLASSES OF ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

(NOK IN MILLION)	2010 MAR 31
Non-current assets	19
Inventories	112
Receivables and other current financial instruments	318
Cash and cash equivalents	34
Total assets	484
Non-current liabilities	4
Current interest bearing liabilities	445
Other current liabilities	134
Total liabilities	583

CUMULATIVE INCOME OR EXPENSE RECOGNIZED IN OTHER COMPREHENSIVE INCOME RELATING TO SOVELLO AT MARCH 31, 2010

(NOK IN MILLION)	TRANSLATION DIFFERENCES	CASH FLOW HEDGE	ACQUISITION
Accumulated at March 31, 2010	30	-1	100

---

SEGMENT INFORMATION - FIRST QUARTER REC GROUP

(NOK IN MILLION)	Q1 2015	Q1 2009	% CHANGE
Revenues
REC Silicon	967	947	2 %
REC Wafer	1 571	1 589	-1 %
REC Solar	567	388	46 %
Other Operations	26	16	nm
Sovello	114	77	47 %
Adjustment for discontinued operations*	-114	-77	47 %
Eliminations	-772	-1 004	nm
Total	2 360	1 936	22 %
Revenues external
REC Silicon	648	353	84 %
REC Wafer	1 146	1 196	-4 %
REC Solar	565	386	46 %
Other Operations	0	0	nm
Sovello	114	77	47 %
Adjustment for discontinued operations*	-114	-77	47 %
Eliminations	0	0	nm
Total	2 360	1 936	22 %
EBITDA
REC Silicon	452	450	1 %
REC Wafer	-13	242	nm
REC Solar	-107	2	nm
Other Operations	5	-41	nm
Sovello	1	18	-92 %
Adjustment for discontinued operations*	-1	-18	-92 %
Eliminations	78	-144	nm
Total	41	510	-19 %
Depreciation, amortization and impairment
REC Silicon	-188	-62	204 %
REC Wafer	-214	-99	117 %
REC Solar	-100	-49	105 %
Other Operations	-38	-2	1607 %
Sovello	-6	-14	-54 %
Adjustment for discontinued operations*	6	14	-54 %
Eliminations	0	0	nm
Total	-540	-211	155 %
EBIT
REC Silicon	264	388	-32 %
REC Wafer	-228	143	nm
REC Solar	-206	-46	344 %
Other Operations	-34	-43	-21 %
Sovello	-5	4	nm
Adjustment for discontinued operations*	5	-4	nm
Eliminations	78	-144	nm
Total	-128	298	nm

• Discontinued operations relates to Sovello.

---

REC First Quarter 2000

QUARTERLY INFORMATION

REC GROUP

(NOK IN MILLION)	Q1 2009	Q2 2009	Q3 2009	Q4 2009	Q1 2010
Revenues	1 936	2 280	2 071	2 545	2 360
EBITDA	510	250	449	595	415
EBITDA – margin	26 %	11 %	22 %	23 %	18 %
EBITDA excluding junction box expenses	512	563	473	620	415
EBIT	298	-52	46	-1 121	-125
EBIT – margin	15 %	nm	2 %	nm	nm
Net financial items	351	-637	-443	257	855
Profit/loss before tax	650	-689	-398	-864	730
Income tax expense/benefit	-215	31	142	143	-326
Profit/loss for the period from continuing operations	435	-658	-256	-721	404
Profit/loss for the period from discontinued operations	-41	-26	-752	-327	-58
Profit/loss for the period from total operations	394	-684	-1 008	-1 048	346
Earnings per share from continuing operations (in NOK)
– basic	0.77	-1.16	-0.38	-1.08	0.61
– diluted	0.77	-1.16	-0.38	-1.08	-0.01
Earnings per share from total operations (in NOK)
– basic	0.69	-1.20	-1.52	-1.58	0.52
– diluted	0.69	-1.20	-1.52	-1.58	-0.09
Expansion costs	98	79	65	72,68	32
EBITDA adjusted for expansion costs	607	329	514	667	447
Adjusted EBITDA – margin	31 %	14 %	25 %	26 %	19 %

QUARTERLY INFORMATION

REC SILICON

(NOK IN MILLION)	Q1 2009	Q2 2009	Q3 2009	Q4 2009	Q1 2010
Revenues	947	929	937	1 130	967
EBITDA	450	442	454	574	452
EBITDA – margin	47 %	48 %	48 %	51 %	47 %
Expansion costs	5	5	9	6	14
EBITDA adjusted for expansion costs	455	447	463	580	466
Adjusted EBITDA – margin	48 %	48 %	49 %	51 %	48 %
Polysilicon production in MT (solar- and electronic grade)	1 657	1 624	1 616	2 125	2 441
Polysilicon sale in MT (all grades)	1 750	1 653	1 736	2 614	3 177
Silane gas sale in MT	366	488	579	755	275

24

---

QUARTERLY INFORMATION

REC WAFER

(NOK IN MILLION)	Q1 2009	Q2 2009	Q3 2009	Q4 2009	Q1 2010
Revenues	1 589	1 525	1 155	1 590	1 571
EBITDA	242	321	77	351	-13
EBITDA – margin	15 %	21 %	7 %	22 %	nm
Expansion costs	64	33	33	24	17
EBITDA adjusted for expansion costs	306	354	110	375	4
Adjusted EBITDA – margin	19 %	23 %	9 %	24 %	0 %
Wafer production in MW (at 15,0% cell efficiency)	181	190	157	230	272
Mono ingot production in MW (at 20,0% cell efficiency)	10	15	17	17	16
Total production in MW	191	205	173	248	287
Wafer sale in MW (at 15,0% cell efficiency)	182	175	154	226	271
Mono ingot sale in MW (at 20,0% cell efficiency)	5	9	4	12	14
Total sale in MW	187	184	158	238	284

QUARTERLY INFORMATION

REC SOLAR

(NOK IN MILLION)	Q1 2009	Q2 2009	Q3 2009	Q4 2009	Q1 2010
Revenues	388	426	524	543	567
EBITDA	2	-528	-256	-219	-107
EBITDA – margin	1 %	nm	nm	nm	nm
EBITDA excluding junction box expenses	4	-215	-232	-194	-107
Expansion costs	25	37	20	40	0
EBITDA adjusted for expansion costs	27	-491	-236	-179	-107
Adjusted EBITDA – margin	7 %	nm	nm	nm	nm
Module production in MW	27	27	23	39	48
Contract manufacturing MW	0	0	0	6	0
External cell sale in MW	1	4	6	5	5
Module sale in MW*	16	24	32	37	43

---

REC First Quarter 2000
26

FINANCIAL EFFECTS EMBEDDED DERIVATIVES REC GROUP

The table below shows the profit or loss effects and earnings per share of embedded derivatives.

(NOK IN MILLION)	ACCUMULATED 2009				ACCUMULATED 2010
	MAR 31	JUN 30	SEP 30	DEC 31	MAR 31
EBITDA*	-20	-27	-21	5	24
Net financial items	-724	-1 591	-3 108	-2 997	55
Income tax expense/benefit	208	453	876	838	-22
Profit/loss for the period	-536	-1 165	-2 253	-2 154	57
Earnings per share (basic)	-0,95	-2,05	-3,75	-3,49	0,09
(NOK IN MILLION)	PER QUARTER 2009				PER QUARTER 2010
---	---	---	---	---	---
	Q1	Q2	Q3	Q4	Q1
EBITDA*	-20	-7	6	26	24
Net financial items	-724	-866	-1 517	111	55
Income tax expense/benefit	208	244	423	-38	-22
Profit/loss for the period	-536	-629	-1 088	99	57
Earnings per share (basic)	-0,95	-1,10	-1,64	0,15	0,09

See consolidated financial statements for 2009 for a description of embedded derivatives.

*The effect on EBITDA is an illustration of how much EBITDA and revenues are affected by not recognizing the revenues on sales in the period at exchange rates at the time of the realization of the sales. Revenues under these contracts are recognized at the forward exchange rates at the time the contracts were entered into.

DEFINITIONS

CONSTANT CURRENCY

Some amounts in the text report have been adjusted for currency translation effects. This adjustment only eliminates the effect of translating the results for REC Silicon (US), REC ScanModule (Sweden) and Sovello (Germany) from their functional currencies to NOK. The exchange rates for the quarter and the year to date 2009 have been used in both periods. This adjustment does not eliminate other effects that currency fluctuations will have on the REC Group financials.

EXPANSION COSTS

Include primarily costs for early recruitment and training etc until start of production.

ABOUT REC

REC is a leading vertically integrated player in the solar energy industry. REC is among the world's largest producers of polysilicon and wafers for solar applications, and a rapidly growing manufacturer of solar cells and modules. REC is also engaged in project development activities in selected PV segments. Founded in Norway, REC is an international solar company, employing more than 3,000 people worldwide. REC had revenues of approximately NOK 9 billion in 2009. Please visit www.recgroup.com to learn more about REC.

FOR MORE INFORMATION, PLEASE CONTACT

Ole Enger, President & CEO
+47 911 38 223

Bjørn Brenna, EVP & CFO
+47 900 43 186

Mikkel Tørud, VP & IRO
+47 976 99 144

---

.

---

REC. Artbox

REC

Renewable Energy Corporation ASA
Kjørboveien 29
PO Box 594
NO-1302 Sandvika
Norway
Tel: +47 67 57 44 50
www.recgroup.com