UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 1, 2012

MagnaChip Semiconductor Corporation
(Exact name of Registrant as specified in its charter)

 
 	 	 	 	 	
Delaware	 	001-34791	 	83-0406195	
(State or Other Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
 	 	
c/o MagnaChip Semiconductor S.A., 74, rue de Merl,
B.P. 709, L-2017 Luxembourg, Grand Duchy of Luxembourg	 	Not Applicable	
(Address of Principal Executive Offices)	 	(Zip Code)	
Registrant’s telephone number, including area code: (352) 45-62-62

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 2.02.	Results of Operations and Financial Condition.	
Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for MagnaChip Semiconductor Corporation and its consolidated subsidiaries for the fourth quarter and year ended December 31, 2011, as presented in a press release dated February 1, 2012.
The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
 
Item 9.01.	Financial Statements and Exhibits.	
 
(d)	Exhibits.	
The following exhibits are furnished as part of this report:

Exhibit
No.	  	Description	
 	 	
99.1	  	Press release for MagnaChip Semiconductor Corporation dated February 1, 2012, announcing the results for the fourth quarter and year ended December 31, 2011.	

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 hereunto duly authorized.

 	 	 	 	 	 	MAGNACHIP SEMICONDUCTOR CORPORATION	
 	 	 	 	 	
Dated: February 1, 2012	 	 	 	 	 	By:	 	/s/ Margaret Sakai	
 	 	 	 	 	 	 	 	Margaret Sakai
Executive Vice President and Chief Financial Officer	

Exhibit Index

Exhibit
No.	  	Description	
 	 	
99.1	  	Press release for MagnaChip Semiconductor Corporation dated February 1, 2012, announcing the results for the fourth quarter and year ended December 31, 2011.	

Exhibit 99.1

Press Release
MagnaChip Reports Fourth Quarter and Full Year 2011 Financial Results
 
 	•	 	Power Solutions Full Year 2011 Revenue Grew 61.6% Year-over-Year	
 
 	•	 	AMOLED Display Full Year 2011 Revenue Grew 700% Year-over-Year	
 
 	•	 	Smartphone and Tablet PC 2011 Design Wins Tripled Year-over-Year	
 
 	•	 	Signed a Definitive Agreement to Acquire Dawin Electronics, a Provider of High-Power Semiconductor Modules	
SEOUL, South Korea and CUPERTINO, Calif., February 1, 2012 — MagnaChip Semiconductor Corporation (“MagnaChip”) (NYSE: MX), a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products, today announced financial results for the quarter and year ended December 31, 2011.
Revenue for the fourth quarter of 2011 was $180.8 million, a 9.8% decrease compared to $200.4 million for the third quarter of 2011, and a 3.2% decrease compared to $186.8 million for the fourth quarter of 2010. For the full year 2011, revenue was $772.8 million compared to $770.4 million for 2010, a 0.3% increase.
Gross profit was $51.5 million or 28.5%, as a percent of revenue, for the fourth quarter of 2011. This compares to gross profit of $60.1 million or 30.0 % for the third quarter of 2011 and $60.4 million or 32.3% for the fourth quarter of 2010. For the full year 2011, gross profit was $234.3 million or 30.3% compared to $243.6 million or 31.6% for 2010.
“I am very pleased that for the fourth consecutive quarter we again met our quarterly revenue guidance in what has been a challenging year for the semiconductor industry. Our successful track record is a result of outstanding relationships with major blue chip customers and a growing list of design-wins targeted at high-growth, high-margin applications,” said Sang Park, MagnaChip’s Chairman and Chief Executive Officer. “Smartphones, tablet PCs, AMOLED displays and Ultrabooks are some examples of growth drivers for MagnaChip in 2012 as well as our rapidly expanding customer base and new product introductions for the power solutions segment. In addition, our recent announcement of the Dawin Electronics Co. Ltd. acquisition strengthens our competitive position in the fast growing IGBT power module business. Looking ahead, we believe there are indications that the first quarter of 2012 could be the bottom of our revenue downturn based on the strength of orders for new products coming from our smartphone and tablet PC customers. Our goal is to grow the business, deliver solid financial performance and to enhance shareholder value in the years to come.”

Net income, on a GAAP basis, for the fourth quarter of 2011 totaled $23.7 million or $0.61 per diluted share. This compares to net loss of $56.0 million or $1.43 per diluted share for the third quarter of 2011 and a net income of $12.3 million or $0.31 per diluted share for the fourth quarter of 2010. For the full year 2011, net income was $21.8 million or $0.55 per diluted share compared to $74.1 million or $1.89 per diluted share for 2010. Net income for 2011 was impacted primarily by a foreign currency loss of $11.6 million compared to a foreign currency gain of $14.7 million for 2010, as well as a special expense for IPO incentive payments of $12.1 million made in 2011. The net foreign currency exposure was primarily related to non-cash translation gains or losses for intercompany balances that were denominated in U.S. dollars.
Adjusted net income, a non-GAAP measurement, for the fourth quarter of 2011 totaled $10.0 million or $0.26 per diluted share compared to $18.2 million or $0.46 per diluted share for the third quarter of 2011 and $17.4 million or $0.44 per diluted share for the fourth quarter of 2010. For the full year 2011, adjusted net income was $66.4 million or $1.67 per diluted share compared to $89.2 million or $2.28 per diluted share for 2010.
Management believes that non-GAAP financial measures, when viewed in conjunction with GAAP results, can provide a more meaningful understanding of the factors and trends affecting MagnaChip’s business and operations. However, such non-GAAP financial measures have limitations and should not be considered as a substitute for net income or as a better indicator of our operating performance than measures that are presented in accordance with GAAP.
Combined cash balances (cash and cash equivalents plus restricted cash) totaled $168.9 million at the end of the fourth quarter of 2011, an increase of $0.2 million from the end of the prior quarter. Cash provided from operations totaled approximately $18.3 million for the fourth quarter of 2011.
Revenue by Segment

In thousands of US dollars	  	Three Months Ended	 	  	Year Ended	 	
 	  	December 31,
2011	 	  	September 30,
2011	 	  	December 31,
2010	 	  	December 31,
2011	 	  	December 31,
2010	 	
Semiconductor Manufacturing Services	  	$	67,973	  	  	$	81,571	  	  	$	97,261	  	  	$	338,268	  	  	$	405,197	  	
Display Solutions	  	 	90,045	  	  	 	91,767	  	  	 	70,581	  	  	 	338,995	  	  	 	305,884	  	
Power Solutions	  	 	22,039	  	  	 	26,358	  	  	 	18,398	  	  	 	92,547	  	  	 	57,273	  	
Other	  	 	769	  	  	 	709	  	  	 	532	  	  	 	3,021	  	  	 	2,051	  	
Total Revenue	  	$	180,826	  	  	$	200,405	  	  	$	186,772	  	  	$	772,831	  	  	$	770,405	  	
Fourth Quarter and Recent Company Highlights
 
 	•	 	Signed a Definitive Agreement to Acquire Dawin Electronics Co. Ltd., a Provider of High-Power Semiconductor Modules.	
 
 	•	 	Repurchased 1.53 Million Shares under MagnaChip’s Stock Repurchase Program Announced October 11, 2011.	
 
 	•	 	Announced the Supply of AMOLED Display Driver ICs for Microsoft Windows-Based Smartphones.	
 
 	•	 	Expanded the LED Driver Product Portfolio to Notebook and Tablet PCs.	
 
 	•	 	Launched Module Based Process Design Kits for Power and Display Driver Applications.	

Non-GAAP Metrics
Adjusted EBITDA excludes charges related to depreciation and amortization, interest expense, net, income tax expense, restructuring and impairment charges, inventory step-up, stock-based compensation expense, foreign currency loss (gain), net, derivative valuation loss, net, special expense for an IPO employee incentive payment, and loss on early extinguishment of senior notes. Adjusted net income (loss) excludes charges related to restructuring and impairment, inventory step-up, stock-based compensation expense, amortization of intangible assets associated with continuing operations, foreign currency loss (gain), net, derivative valuation loss, net, special expense for an IPO employee incentive payment, and loss on early extinguishment of senior notes. A reconciliation of GAAP results to non-GAAP results is included following the financial statements.
About MagnaChip Semiconductor Corporation
Headquartered in South Korea, MagnaChip is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high-volume consumer applications. MagnaChip believes it has one of the broadest and deepest ranges of analog and mixed-signal semiconductor platforms in the industry, supported by its 30-year operating history, a large portfolio of registered and pending patents, and extensive engineering and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through, MagnaChip’s website is not a part of, and is not incorporated into, this release.
Safe Harbor for Forward-Looking Statements
Information in this release regarding MagnaChip’s forecasts, business outlook, expectations and beliefs are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include statements about our ability to capitalize on improving market dynamics and future operating and financial performance including first quarter 2012 revenue. All forward-looking statements included in this release are based upon information available to MagnaChip Semiconductor as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include general economic conditions, the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new products and technologies, ability to ramp new products into volume production, industry wide shifts in supply and demand for semiconductor products, industry and/or company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets and the impact of foreign exchange rates, unanticipated costs and expenses or the inability to identify expenses which can be eliminated, compliance with U.S. and international trade and export laws and regulations by us and our distributors, and other risks detailed from time to time in MagnaChip’s filings with the SEC, including our Form 10-K filed on March 18, 2011 and subsequent registration statements, amendments or other reports that we may file from time to time with the SEC and/or make available on our website. MagnaChip assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise.
CONTACTS:

 	 	 	
 	 	
In the United States:
Robert Pursel
Director of Investor Relations
Tel. 408-625-1262
robert.pursel@magnachip.com	  	In Korea:
Chankeun Park
Senior Manager, Public Relations
Tel. +82-2-6903-3195
chankeun.park@magnachip.com	
# # #

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of US dollars, except share data)
(Unaudited)

 	  	Three Months Ended	 	 	Year Ended	 	
 	  	December 31,
2011	 	 	September 30,
2011	 	 	December 31,
2010	 	 	December 31,
2011	 	 	December 31,
2010	 	
Net sales	  	$	180,826	  	 	$	200,405	  	 	$	186,772	  	 	$	772,831	  	 	$	770,405	  	
Cost of sales	  	 	129,287	  	 	 	140,284	  	 	 	126,421	  	 	 	538,515	  	 	 	526,847	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	  	 	51,539	  	 	 	60,121	  	 	 	60,351	  	 	 	234,316	  	 	 	243,558	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit %	  	 	28.5	% 	 	 	30.0	% 	 	 	32.3	% 	 	 	30.3	% 	 	 	31.6	% 	
Selling, general and administrative expense	  	 	17,627	  	 	 	17,881	  	 	 	16,566	  	 	 	68,367	  	 	 	66,640	  	
Research and development expense	  	 	18,652	  	 	 	19,003	  	 	 	19,331	  	 	 	76,767	  	 	 	83,524	  	
Restructuring and impairment charges	  	 	—  	  	 	 	1,621	  	 	 	958	  	 	 	4,096	  	 	 	2,003	  	
Special expense for IPO incentive	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	12,146	  	 	 	—  	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	15,260	  	 	 	21,616	  	 	 	23,496	  	 	 	72,940	  	 	 	91,391	  	
Other income (expense)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense, net	  	 	(5,644	) 	 	 	(5,860	) 	 	 	(6,981	) 	 	 	(24,984	) 	 	 	(22,899	) 	
Foreign currency gain (loss), net	  	 	16,832	  	 	 	(68,058	) 	 	 	(19	) 	 	 	(11,633	) 	 	 	14,724	  	
Loss on early extinguishment of senior notes	  	 	—  	  	 	 	(1,357	) 	 	 	—  	  	 	 	(5,459	) 	 	 	—  	  	
Other	  	 	(862	) 	 	 	(558	) 	 	 	(16	) 	 	 	(1,052	) 	 	 	(706	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	 	10,326	  	 	 	(75,833	) 	 	 	(7,016	) 	 	 	(43,128	) 	 	 	(8,881	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income taxes	  	 	25,586	  	 	 	(54,217	) 	 	 	16,480	  	 	 	29,812	  	 	 	82,510	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income tax expense	  	 	1,881	  	 	 	1,793	  	 	 	4,209	  	 	 	8,019	  	 	 	8,390	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	$	23,705	  	 	$	(56,010	) 	 	$	12,271	  	 	$	21,793	  	 	$	74,120	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) per common share :	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Basic	  	$	0.61	  	 	$	(1.43	) 	 	$	0.32	  	 	$	0.56	  	 	$	1,96	  	
- Diluted	  	$	0.61	  	 	$	(1.43	) 	 	$	0.31	  	 	$	0.55	  	 	$	1.89	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of shares—Basic	  	 	38,632,975	  	 	 	39,064,071	  	 	 	37,898,912	  	 	 	38,775,642	  	 	 	37,836,256	  	
Weighted average number of shares—Diluted	  	 	39,110,759	  	 	 	39,064,071	  	 	 	39,269,465	  	 	 	39,774,898	  	 	 	39,144,287	  	

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED NET INCOME
(In thousands of US dollars, except share data)
(Unaudited)

 	  	Three Months Ended	 	  	Year Ended	 	
 	  	December 31,
2011	 	 	September 30,
2011	 	 	December 31,
2010	 	  	December 31,
2011	 	  	December 31,
2010	 	
Net income (loss)	  	$	23,705	  	 	$	(56,010	) 	 	$	12,271	  	  	$	21,793	  	  	$	74,120	  	
Adjustments:	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Depreciation and amortization	  	 	8,856	  	 	 	13,053	  	 	 	14,063	  	  	 	51,224	  	  	 	58,395	  	
Interest expense, net	  	 	5,644	  	 	 	5,861	  	 	 	6,981	  	  	 	24,984	  	  	 	22,899	  	
Income tax expense	  	 	1,881	  	 	 	1,793	  	 	 	4,209	  	  	 	8,019	  	  	 	8,390	  	
Restructuring and impairment charges	  	 	—  	  	 	 	1,621	  	 	 	958	  	  	 	4,096	  	  	 	2,003	  	
Inventory step-up	  	 	—  	  	 	 	—  	  	 	 	—  	  	  	 	—  	  	  	 	867	  	
Stock-based compensation expense	  	 	287	  	 	 	552	  	 	 	1,167	  	  	 	2,085	  	  	 	5,239	  	
Foreign currency loss (gain), net	  	 	(16,832	) 	 	 	68,058	  	 	 	19	  	  	 	11,633	  	  	 	(14,724	) 	
Derivative valuation loss, net	  	 	862	  	 	 	558	  	 	 	16	  	  	 	1,059	  	  	 	711	  	
Special expense for IPO incentive	  	 	—  	  	 	 	—  	  	 	 	—  	  	  	 	12,146	  	  	 	—  	  	
Loss on early extinguishment of senior notes	  	 	—  	  	 	 	1,357	  	 	 	—  	  	  	 	5,459	  	  	 	—  	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Adjusted EBITDA	  	$	24,403	  	 	$	36,843	  	 	$	39,684	  	  	$	142,498	  	  	$	157,900	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Adjusted EBITDA per common share:	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
- Diluted	  	$	0.62	  	 	$	0.92	  	 	$	1.01	  	  	$	3.58	  	  	$	4.03	  	
Weighted average number of shares - Diluted	  	 	39,110,759	  	 	 	39,973,691	  	 	 	39,269,465	  	  	 	39,774,898	  	  	 	39,144,287	  	
Net income (loss)	  	$	23,705	  	 	$	(56,010	) 	 	$	12,271	  	  	$	21,793	  	  	$	74,120	  	
Adjustments:	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Restructuring and impairment charges	  	 	—  	  	 	 	1,621	  	 	 	958	  	  	 	4,096	  	  	 	2,003	  	
Inventory step-up	  	 	—  	  	 	 	—  	  	 	 	—  	  	  	 	—  	  	  	 	867	  	
Stock-based compensation expense	  	 	287	  	 	 	552	  	 	 	1,167	  	  	 	2,085	  	  	 	5,239	  	
Amortization of intangibles	  	 	1,985	  	 	 	2,092	  	 	 	2,937	  	  	 	8,147	  	  	 	21,033	  	
Foreign currency loss (gain), net	  	 	(16,832	) 	 	 	68,058	  	 	 	19	  	  	 	11,633	  	  	 	(14,724	) 	
Derivative valuation loss, net	  	 	862	  	 	 	558	  	 	 	16	  	  	 	1,059	  	  	 	711	  	
Special expense for IPO incentive	  	 	—  	  	 	 	—  	  	 	 	—  	  	  	 	12,146	  	  	 	—  	  	
Loss on early extinguishment of senior notes	  	 	—  	  	 	 	1,357	  	 	 	—  	  	  	 	5,459	  	  	 	—  	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Adjusted net income	  	$	10,007	  	 	$	18,228	  	 	$	17,368	  	  	$	66,418	  	  	$	89,249	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Adjusted net income per common share:	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
- Diluted	  	$	0.26	  	 	$	0.46	  	 	$	0.44	  	  	$	1.67	  	  	$	2.28	  	
Weighted average number of shares - Diluted	  	 	39,110,759	  	 	 	39,973,691	  	 	 	39,269,465	  	  	 	39,774,898	  	  	 	39,144,287	  	
We define Adjusted EBITDA as net income (loss) adjusted to exclude (i) depreciation and amortization (ii) interest expense, net, (iii) income tax expense, (iv) restructuring and impairment charges, (v) the increase in cost of sales resulting from the fresh-start accounting inventory step-up, (vi) stock-based compensation expense, (vii) foreign currency loss (gain), net, (viii) derivative valuation loss, net, (ix) Special expense for IPO incentive, and (x) loss on early extinguishment of senior notes.
We present Adjusted Net Income as a further supplemental measure of our performance. We prepare Adjusted Net Income by adjusting net income(loss) to eliminate the impact of a number of non-cash expenses and other items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance. We believe that Adjusted Net Income is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Income as net income (loss) adjusted to exclude (i) restructuring and impairment charges, (ii) the increase in cost of sales resulting from the fresh-start accounting inventory step-up, (iii) stock-based compensation expense, (iv) amortization of intangibles, (v) foreign currency loss (gain), net, (vi) derivative valuation loss, net, (vii) Special expense for IPO incentive and (viii) loss on early extinguishment of senior notes.

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars, except share data)
(Unaudited)

 	  	December 31,
2011	 	 	December 31,
2010	 	
Assets	  	 	 	 	 	 	 	 	
Current assets	  	 	 	 	 	 	 	 	
Cash and cash equivalents	  	$	162,111	  	 	$	172,172	  	
Restricted cash	  	 	6,830	  	 	 	—  	  	
Accounts receivable, net	  	 	125,922	  	 	 	119,054	  	
Inventories, net	  	 	62,836	  	 	 	68,435	  	
Other receivables	  	 	256	  	 	 	2,919	  	
Prepaid expenses	  	 	6,032	  	 	 	8,207	  	
Other current assets	  	 	15,909	  	 	 	18,920	  	
 	  	 	 	 	 	 	 	 	
Total current assets	  	 	379,896	  	 	 	389,707	  	
 	  	 	 	 	 	 	 	 	
Property, plant and equipment, net	  	 	182,663	  	 	 	179,012	  	
Intangible assets, net	  	 	16,787	  	 	 	27,538	  	
Long-term prepaid expenses	  	 	4,790	  	 	 	8,235	  	
Other non-current assets	  	 	18,539	  	 	 	21,252	  	
 	  	 	 	 	 	 	 	 	
Total assets	  	$	602,675	  	 	$	625,744	  	
 	  	 	 	 	 	 	 	 	
Liabilities and Stockholders’ Equity	  	 	 	 	 	 	 	 	
Current liabilities	  	 	 	 	 	 	 	 	
Accounts payable	  	$	77,848	  	 	$	58,264	  	
Other accounts payable	  	 	13,452	  	 	 	14,645	  	
Accrued expenses	  	 	31,723	  	 	 	32,635	  	
Current portion of capital lease obligations	  	 	2,852	  	 	 	5,557	  	
Other current liabilities	  	 	11,764	  	 	 	5,048	  	
 	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	137,639	  	 	 	116,149	  	
Long-term borrowings, net	  	 	201,389	  	 	 	246,882	  	
Long-term obligations under capital lease	  	 	—  	  	 	 	3,105	  	
Accrued severance benefits, net	  	 	90,755	  	 	 	87,778	  	
Other non-current liabilities	  	 	6,222	  	 	 	8,979	  	
 	  	 	 	 	 	 	 	 	
Total liabilities	  	 	436,005	  	 	 	462,893	  	
 	  	 	 	 	 	 	 	 	
Commitments and contingencies	  	 	 	 	 	 	 	 	
Stockholder’ equity	  	 	 	 	 	 	 	 	
Common stock, $0.01 par value, 150,000,000 shares authorized, 39,439,115 shares issued and 37,907,575 outstanding at December 31, 2011 and 38,401,989 shares issued and outstanding at December 31, 2010	  	 	394	  	 	 	384	  	
Additional paid-in capital	  	 	98,929	  	 	 	95,585	  	
Retained earnings	  	 	93,950	  	 	 	72,157	  	
Treasury stock	  	 	(11,793	) 	 	 	—  	  	
Accumulated other comprehensive loss	  	 	(14,810	) 	 	 	(5,275	) 	
 	  	 	 	 	 	 	 	 	
Total stockholders’ equity	  	 	166,670	  	 	 	162,851	  	
 	  	 	 	 	 	 	 	 	
Total liabilities and stockholders’ equity	  	$	602,675	  	 	$	625,744	  	

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US dollars)
(Unaudited)

 	  	Three Months
Ended	 	 	Year Ended	 	
 	  	December 31,
2011	 	 	December 31,
2011	 	 	December 31,
2010	 	
Cash flows from operating activities	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	23,705	  	 	$	21,793	  	 	$	74,120	  	
Adjustments to reconcile net income to net cash provided by operating activities	  	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	  	 	8,856	  	 	 	51,224	  	 	 	58,395	  	
Provision for severance benefits	  	 	1,561	  	 	 	14,698	  	 	 	19,684	  	
Amortization of debt issuance costs and original issue discount	  	 	242	  	 	 	970	  	 	 	925	  	
Loss (gain) on foreign currency translation, net	  	 	(18,080	) 	 	 	15,140	  	 	 	(17,084	) 	
Loss (gain) on disposal of property, plant and equipment, net	  	 	(107	) 	 	 	(122	) 	 	 	39	  	
Loss on disposal of intangible assets, net	  	 	8	  	 	 	25	  	 	 	13	  	
Restructuring and impairment charges	  	 	(1,597	) 	 	 	2,499	  	 	 	2,003	  	
Stock-based compensation	  	 	287	  	 	 	2,085	  	 	 	5,239	  	
Cash used for reorganization items	  	 	—  	  	 	 	—  	  	 	 	1,573	  	
Loss on early extinguishment of senior notes	  	 	—  	  	 	 	5,459	  	 	 	—  	  	
Other	  	 	1,030	  	 	 	1,682	  	 	 	4,177	  	
Changes in operating assets and liabilities	  	 	 	 	 	 	 	 	 	 	 	 	
Accounts receivable	  	 	(1,834	) 	 	 	(6,234	) 	 	 	(41,370	) 	
Inventories	  	 	8,674	  	 	 	4,274	  	 	 	(3,172	) 	
Other receivables	  	 	1,821	  	 	 	2,657	  	 	 	297	  	
Other current assets	  	 	(1,885	) 	 	 	(5,081	) 	 	 	2,997	  	
Deferred tax assets	  	 	(71	) 	 	 	1,412	  	 	 	1,543	  	
Accounts payable	  	 	3,012	  	 	 	18,084	  	 	 	(5,049	) 	
Other accounts payable	  	 	9,396	  	 	 	16,553	  	 	 	8,483	  	
Accrued expenses	  	 	(10,743	) 	 	 	(29,021	) 	 	 	3,992	  	
Other current liabilities	  	 	(1,841	) 	 	 	(3,050	) 	 	 	962	  	
Payment of severance benefits	  	 	(3,929	) 	 	 	(10,478	) 	 	 	(6,673	) 	
Other	  	 	(179	) 	 	 	(38	) 	 	 	(3,129	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities before reorganization items	  	 	18,326	  	 	 	104,531	  	 	 	107,965	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Cash used for reorganization items	  	 	—  	  	 	 	—  	  	 	 	(1,573	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	 	18,326	  	 	 	104,531	  	 	 	106,392	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities	  	 	 	 	 	 	 	 	 	 	 	 	
Decrease (increase) in restricted cash	  	 	2,512	  	 	 	(7,199	) 	 	 	—  	  	
Proceeds from disposal of plant, property and equipment	  	 	190	  	 	 	219	  	 	 	10	  	
Purchase of plant, property and equipment	  	 	(5,228	) 	 	 	(48,173	) 	 	 	(43,616	) 	
Payment for intellectual property registration	  	 	(175	) 	 	 	(696	) 	 	 	(553	) 	
Decrease in short-term financial instruments	  	 	—  	  	 	 	—  	  	 	 	329	  	
Collection of guarantee deposits	  	 	567	  	 	 	1,544	  	 	 	1,198	  	
Payment of guarantee deposits	  	 	—  	  	 	 	(2,482	) 	 	 	(1,090	) 	
Other	  	 	254	  	 	 	(371	) 	 	 	(6	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in investing activities	  	 	(1,880	) 	 	 	(57,158	) 	 	 	(43,728	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities	  	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from issuance of common stock	  	 	501	  	 	 	9,336	  	 	 	—  	  	
Proceeds from issuance of senior notes	  	 	—  	  	 	 	—  	  	 	 	246,685	  	
Debt issuance costs paid	  	 	—  	  	 	 	—  	  	 	 	(8,313	) 	
Distribution to stockholders	  	 	—  	  	 	 	—  	  	 	 	(130,689	) 	
Repayment of long-term borrowings	  	 	—  	  	 	 	—  	  	 	 	(61,750	) 	
Repurchase of senior notes	  	 	—  	  	 	 	(50,307	) 	 	 	—  	  	
Repayment of obligations under capital lease	  	 	(1,481	) 	 	 	(6,312	) 	 	 	(3,476	) 	
Acquisition of treasury stock	  	 	(11,793	) 	 	 	(11,793	) 	 	 	—  	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) financing activities	  	 	(12,773	) 	 	 	(59,076	) 	 	 	42,457	  	
Effect of exchange rates on cash and cash equivalents	  	 	(1,030	) 	 	 	1,642	  	 	 	2,126	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	  	 	2,643	  	 	 	(10,061	) 	 	 	107,247	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	  	 	 	 	 	 	 	 	 	 	 	 	
Beginning of the period	  	 	159,468	  	 	 	172,172	  	 	 	64,925	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
End of the period	  	$	162,111	  	 	$	162,111	  	 	$	172,172