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): January 30, 2013

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, 2012, as presented in a press release dated January 30, 2013.
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 January 30, 2013, announcing the results for the fourth quarter and year ended December 31, 2012.	

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: January 30, 2013	 	 	 	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 January 30, 2013, announcing the results for the fourth quarter and year ended December 31, 2012.	

Exhibit 99.1

 	  	 	
Press Release	
MagnaChip Reports Fourth Quarter and Full Year 2012 Financial Results
 
 	•	 	Revenue Increased 6.1% For the Full Year	
 
 	•	 	Gross Margin Increased 190 Basis Points For the Full Year	
 
 	•	 	Achieved 2012 GAAP EPS of $5.16 Per Diluted Share, Adjusted EPS of $2.23 Per Diluted Share	
SEOUL, South Korea and CUPERTINO, Calif., January 30, 2013 — 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, 2012.
Revenue for the fourth quarter of 2012 was $218.1 million, a 1.7% decrease compared to $221.9 million for the third quarter of 2012, and a 20.6% increase compared to $180.8 million for the fourth quarter of 2011. For the full year 2012, revenue was $819.6 million compared to $772.8 million for 2011, a 6.1% increase.
Gross margin was $74.3 million or 34.1%, as a percent of revenue, for the fourth quarter of 2012. This compares to gross profit of $76.4 million or 34.5 % for the third quarter of 2012 and $51.5 million or 28.5% for the fourth quarter of 2011. For the full year 2012, gross profit was $263.5 million or 32.2% compared to $234.3 million or 30.3% for 2011.
Net income, on a GAAP basis, for the fourth quarter of 2012 totaled $125.3 million or $3.38 per diluted share. This compares to net income of $48.4 million or $1.30 per diluted share for the third quarter of 2012 and a net income of $23.7 million or $0.61 per diluted share for the fourth quarter of 2011. For the full year 2012, net income was $193.3 million or $5.16 per diluted share compared to $21.8 million or $0.55 per diluted share for 2011. Net income for 2012 was impacted primarily by a gross margin of $263.5 million compared to $234.3 million for 2011, recognition of deferred tax assets of $64.7 million in 2012, and a foreign currency gain of $56.0 million compared to a foreign currency loss of $11.6 million for 2011, which was primarily related to non-cash foreign currency translation for intercompany balances that were denominated in U.S. dollars.
“I am very pleased that we ended 2012 with revenue of $819.6 million dollars, up 6.1% from 2011 and outpacing the semiconductor industry, which declined 3.0% this year. While the macro environment remained weak, we have successfully aligned with the growing smartphone and tablet PC market, leveraged our strong relationships with blue chip customers, and delivered 30% more new products in 2012 from the previous year,” said Sang Park, MagnaChip Chairman and CEO. “I believe that this will help differentiate us from our competitors and allow us to perform better than the market in 2013. Compared to the same quarter last year, Q4 revenue and gross margin maintained better momentum due to a successful mix shift of products and customers and improved utilization from our mixed business model. Our revenue and margin performance this quarter represents our eighth consecutive quarter of meeting or exceeding guidance.”

Adjusted net income, a non-GAAP measurement, for the fourth quarter of 2012 totaled $28.7 million or $0.77 per diluted share compared to $30.4 million or $0.81 per diluted share for the third quarter of 2012 and $10.0 million or $0.26 per diluted share for the fourth quarter of 2011. For the full year 2012, adjusted net income was $83.5 million or $2.23 per diluted share compared to $66.4 million or $1.67 per diluted share for 2011.
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 $182.4 million at the end of the fourth quarter of 2012, an increase of $16.6 million from the end of the prior quarter. Cash provided from operations totaled approximately $31.5 million for the fourth quarter of 2012.
Revenue by Segment

In thousands of US dollars	  	Three Months Ended	 	  	Year Ended	 	
 	  	December 31,
2012	 	  	September 30,
2012	 	  	December 31,
2011	 	  	December 31,
2012	 	  	December 31,
2011	 	
Semiconductor Manufacturing Services	  	$	112,654	  	  	$	117,978	  	  	$	67,973	  	  	$	389,812	  	  	$	338,268	  	
Display Solutions	  	 	72,806	  	  	 	69,415	  	  	 	90,045	  	  	 	302,230	  	  	 	338,995	  	
Power Solutions	  	 	31,949	  	  	 	33,849	  	  	 	22,039	  	  	 	124,750	  	  	 	92,547	  	
Other	  	 	675	  	  	 	630	  	  	 	769	  	  	 	2,800	  	  	 	3,021	  	
Total Revenue	  	$	218,084	  	  	$	221,872	  	  	$	180,826	  	  	$	819,592	  	  	$	772,831	  	
Fourth Quarter and Recent Company Highlights
 
 	•	 	Power Solutions 2012 Revenue Grew 34.8% for the Full Year.	
 
 	•	 	AMOLED 2012 Revenue from Smartphones Grew 47.0% for the Full Year.	
 
 	•	 	Eighth Consecutive Quarter of Achieving Financial Guidance.	
 
 	•	 	Repurchased 406 Thousand Shares in Q4 under MagnaChip’s 2011 Stock Repurchase Program.	
Business Outlook
For the first quarter of 2013, MagnaChip expects:
 
 	•	 	Revenue will be in the range of $201 million to $209 million.	
 
 	•	 	Gross margin will be 31.0% to 33.0% as a percent of revenue.	

Non-GAAP Metrics
Adjusted EBITDA excludes charges related to depreciation and amortization, interest expense, net, income tax expense (benefit), restructuring and impairment charges, stock-based compensation expense, foreign currency loss (gain), net, derivative valuation loss (gain), net, secondary offering and others, special expense for an IPO employee incentive payment, and loss on early extinguishment of senior notes. Adjusted net income excludes charges related to restructuring and impairment, stock-based compensation expense, amortization of intangible assets associated with continuing operations, foreign currency loss (gain), net, derivative valuation loss (gain), net, secondary offering and others, GAAP and cash tax expense difference, 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.
Conference Call
MagnaChip will hold a conference call at 2 p.m. PST today to discuss the fourth quarter 2012 financial results. The conference call will be webcast live and is also available by dialing 1-866-776-2061 in the U.S. or 1-706-679-0298 for all other locations. The conference ID number is 86473379 and participants are encouraged to initiate their calls at least 10 minutes in advance of the 2 p.m. PST start time to ensure a timely connection. The webcast and earnings release will be accessible at  www.magnachip.com .
A replay of the conference call will be available the same day and will run for 72 hours. The replay access numbers are 1-855-859-2056 or 1-404-537-3406. The access code is 86473379.
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 2013 revenue and gross margin. 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 8, 2012 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. +1-408-625-1262
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,
2012	 	 	September 30,
2012	 	 	December 31,
2011	 	 	December 31,
2012	 	 	December 31,
2011	 	
Net sales	  	$	218,084	  	 	$	221,872	  	 	$	180,826	  	 	$	819,592	  	 	$	772,831	  	
Cost of sales	  	 	143,796	  	 	 	145,432	  	 	 	129,287	  	 	 	556,091	  	 	 	538,515	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	  	 	74,288	  	 	 	76,440	  	 	 	51,539	  	 	 	263,501	  	 	 	234,316	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit %	  	 	34.1	% 	 	 	34.5	% 	 	 	28.5	% 	 	 	32.2	% 	 	 	30.3	% 	
Selling, general and administrative expenses	  	 	19,281	  	 	 	21,388	  	 	 	17,627	  	 	 	78,971	  	 	 	68,367	  	
Research and development expenses	  	 	19,660	  	 	 	19,470	  	 	 	18,652	  	 	 	78,723	  	 	 	76,767	  	
Restructuring and impairment charges	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	4,096	  	
Special expense for IPO incentive	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	12,146	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	35,347	  	 	 	35,582	  	 	 	15,260	  	 	 	105,807	  	 	 	72,940	  	
Other income (expenses)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense, net	  	 	(5,655	) 	 	 	(5,746	) 	 	 	(5,644	) 	 	 	(22,600	) 	 	 	(24,984	) 	
Foreign currency gain (loss), net	  	 	33,656	  	 	 	21,782	  	 	 	16,832	  	 	 	55,961	  	 	 	(11,633	) 	
Loss on early extinguishment of senior notes	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(5,459	) 	
Other	  	 	634	  	 	 	695	  	 	 	(862	) 	 	 	2,119	  	 	 	(1,052	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	 	28,635	  	 	 	16,731	  	 	 	10,326	  	 	 	35,480	  	 	 	(43,128	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes	  	 	63,982	  	 	 	52,313	  	 	 	25,586	  	 	 	141,287	  	 	 	29,812	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income tax expense (benefit)	  	 	(61,304	) 	 	 	3,901	  	 	 	1,881	  	 	 	(52,014	) 	 	 	8,019	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	125,286	  	 	$	48,412	  	 	$	23,705	  	 	$	193,301	  	 	$	21,793	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings per common share :	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Basic	  	$	3.50	  	 	$	1.34	  	 	$	0.61	  	 	$	5.29	  	 	$	0.56	  	
- Diluted	  	$	3.38	  	 	$	1.30	  	 	$	0.61	  	 	$	5.16	  	 	$	0.55	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of shares—Basic	  	 	35,845,367	  	 	 	36,199,655	  	 	 	38,632,975	  	 	 	36,567,684	  	 	 	38,775,642	  	
Weighted average number of shares—Diluted	  	 	37,074,657	  	 	 	37,324,787	  	 	 	39,110,759	  	 	 	37,496,965	  	 	 	39,774,898	  	

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,
2012	 	 	September 30,
2012	 	 	December 31,
2011	 	 	December 31,
2012	 	 	December 31,
2011	 	
Net income	  	$	125,286	  	 	$	48,412	  	 	$	23,705	  	 	$	193,301	  	 	$	21,793	  	
Adjustments:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	  	 	8,550	  	 	 	8,443	  	 	 	8,856	  	 	 	32,390	  	 	 	51,224	  	
Interest expense, net	  	 	5,655	  	 	 	5,746	  	 	 	5,644	  	 	 	22,600	  	 	 	24,984	  	
Income tax expense (benefit)	  	 	(61,304	) 	 	 	3,901	  	 	 	1,881	  	 	 	(52,014	) 	 	 	8,019	  	
Restructuring and impairment charges	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	4,096	  	
Stock-based compensation expense	  	 	546	  	 	 	535	  	 	 	287	  	 	 	1,996	  	 	 	2,085	  	
Foreign currency loss (gain), net	  	 	(33,656	) 	 	 	(21,782	) 	 	 	(16,832	) 	 	 	(55,961	) 	 	 	11,633	  	
Derivative valuation loss (gain), net	  	 	(634	) 	 	 	(695	) 	 	 	862	  	 	 	(2,115	) 	 	 	1,059	  	
Secondary offering and others	  	 	—  	  	 	 	2,119	  	 	 	—  	  	 	 	3,335	  	 	 	—  	  	
Special expense for IPO incentive	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	12,146	  	
Loss on early extinguishment of senior notes	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	5,459	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	  	$	44,443	  	 	$	46,679	  	 	$	24,403	  	 	$	143,532	  	 	$	142,498	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA per common share:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Diluted	  	$	1.20	  	 	$	1.25	  	 	$	0.62	  	 	$	3.83	  	 	$	3.58	  	
Weighted average number of shares—Diluted	  	 	37,074,657	  	 	 	37,324,787	  	 	 	39,110,759	  	 	 	37,496,965	  	 	 	39,774,898	  	
Net income	  	$	125,286	  	 	$	48,412	  	 	$	23,705	  	 	$	193,301	  	 	$	21,793	  	
Adjustments:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring and impairment charges	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	4,096	  	
Stock-based compensation expense	  	 	546	  	 	 	535	  	 	 	287	  	 	 	1,996	  	 	 	2,085	  	
Amortization of intangibles	  	 	1,893	  	 	 	1,829	  	 	 	1,985	  	 	 	7,695	  	 	 	8,147	  	
Foreign currency loss (gain), net	  	 	(33,656	) 	 	 	(21,782	) 	 	 	(16,832	) 	 	 	(55,961	) 	 	 	11,633	  	
Derivative valuation loss (gain), net	  	 	(634	) 	 	 	(695	) 	 	 	862	  	 	 	(2,115	) 	 	 	1,059	  	
Secondary offering and others	  	 	—  	  	 	 	2,119	  	 	 	—  	  	 	 	3,335	  	 	 	—  	  	
GAAP and cash tax expense difference	  	 	(64,749	) 	 	 	—  	  	 	 	—  	  	 	 	(64,749	) 	 	 	—  	  	
Special expense for IPO incentive	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	12,146	  	
Loss on early extinguishment of senior notes	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	5,459	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted net income	  	$	28,686	  	 	$	30,418	  	 	$	10,007	  	 	$	83,502	  	 	$	66,418	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted net income per common share:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Diluted	  	$	0.77	  	 	$	0.81	  	 	$	0.26	  	 	$	2.23	  	 	$	1.67	  	
Weighted average number of shares—Diluted	  	 	37,074,657	  	 	 	37,324,787	  	 	 	39,110,759	  	 	 	37,496,965	  	 	 	39,774,898	  	
We define Adjusted EBITDA as net income adjusted to exclude (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) restructuring and impairment charges, (v) stock-based compensation expense, (vi) foreign currency loss (gain), net, (vii) derivative valuation loss (gain), net, (viii) secondary offering and others, (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 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 adjusted to exclude (i) restructuring and impairment charges, (ii) stock-based compensation expense, (iii) amortization of intangibles, (iv) foreign currency loss (gain), net, (v) derivative valuation loss (gain), net, (vi) secondary offering and others, (vii) GAAP and cash tax expense difference, (viii) Special expense for IPO incentive, and (ix) 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,
2012	 	 	December 31,
2011	 	
Assets	  	 	 	 	
Current assets	  	 	 	 	
Cash and cash equivalents	  	$	182,238	  	 	$	162,111	  	
Restricted cash	  	 	133	  	 	 	6,830	  	
Accounts receivable, net	  	 	143,331	  	 	 	125,922	  	
Inventories, net	  	 	89,363	  	 	 	62,836	  	
Other receivables	  	 	1,429	  	 	 	256	  	
Prepaid expenses	  	 	7,884	  	 	 	6,032	  	
Current deferred income tax assets	  	 	22,768	  	 	 	3,406	  	
Other current assets	  	 	9,680	  	 	 	12,503	  	
 	  	 	 	 	 	 	 	 	
Total current assets	  	 	456,826	  	 	 	379,896	  	
 	  	 	 	 	 	 	 	 	
Property, plant and equipment, net	  	 	238,256	  	 	 	182,663	  	
Intangible assets, net	  	 	15,260	  	 	 	16,787	  	
Long-term prepaid expenses	  	 	18,048	  	 	 	4,790	  	
Deferred income tax assets	  	 	46,710	  	 	 	3,537	  	
Other non-current assets	  	 	14,866	  	 	 	15,002	  	
 	  	 	 	 	 	 	 	 	
Total assets	  	$	789,966	  	 	$	602,675	  	
 	  	 	 	 	 	 	 	 	
Liabilities and Stockholders’ Equity	  	 	 	 	
Current liabilities	  	 	 	 	
Accounts payable	  	$	79,236	  	 	$	77,848	  	
Other accounts payable	  	 	15,600	  	 	 	13,452	  	
Accrued expenses	  	 	43,486	  	 	 	31,723	  	
Current portion of capital lease obligations	  	 	—  	  	 	 	2,852	  	
Derivative liabilities	  	 	—  	  	 	 	9,757	  	
Other current liabilities	  	 	9,973	  	 	 	2,007	  	
 	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	148,295	  	 	 	137,639	  	
Long-term borrowings, net	  	 	201,653	  	 	 	201,389	  	
Accrued severance benefits, net	  	 	112,446	  	 	 	90,755	  	
Other non-current liabilities	  	 	17,263	  	 	 	6,222	  	
 	  	 	 	 	 	 	 	 	
Total liabilities	  	 	479,657	  	 	 	436,005	  	
 	  	 	 	 	 	 	 	 	
Stockholders’ equity	  	 	 	 	
Common stock, $0.01 par value, 150,000,000 shares authorized, 39,599,374 shares issued and 35,635,357 shares outstanding at December 31, 2012 and 39,439,115 shares issued and 37,907,575 shares outstanding at December 31, 2011	  	 	396	  	 	 	394	  	
Additional paid-in capital	  	 	101,885	  	 	 	98,929	  	
Retained earnings	  	 	287,251	  	 	 	93,950	  	
Treasury stock, 3,964,017 shares at December 31, 2012 and 1,531,540 shares at December 31, 2011	  	 	(39,918	) 	 	 	(11,793	) 	
Accumulated other comprehensive loss	  	 	(39,305	) 	 	 	(14,810	) 	
 	  	 	 	 	 	 	 	 	
Total stockholders’ equity	  	 	310,309	  	 	 	166,670	  	
 	  	 	 	 	 	 	 	 	
Total liabilities and stockholders’ equity	  	$	789,966	  	 	$	602,675	  	

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

 	  	Three Months
Ended	 	 	Year Ended	 	
 	  	December 31,
2012	 	 	December 31,
2012	 	 	December 31,
2011	 	
Cash flow from operating activities	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	125,286	  	 	$	193,301	  	 	$	21,793	  	
Adjustments to reconcile net income to net cash provided by operating activities	  	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	  	 	8,550	  	 	 	32,390	  	 	 	51,224	  	
Provision for severance benefits	  	 	4,158	  	 	 	20,937	  	 	 	14,698	  	
Amortization of debt issuance costs and original issue discount	  	 	256	  	 	 	1,009	  	 	 	970	  	
Loss (gain) on foreign currency translation, net	  	 	(38,263	) 	 	 	(63,567	) 	 	 	15,140	  	
Loss (gain) on disposal of property, plant and equipment, net	  	 	2	  	 	 	(172	) 	 	 	(122	) 	
Loss on disposal of intangible assets, net	  	 	1	  	 	 	27	  	 	 	25	  	
Restructuring and impairment charges	  	 	—  	 	 	 	—  	 	 	 	2,499	  	
Stock-based compensation	  	 	546	  	 	 	1,996	  	 	 	2,085	  	
Loss on early extinguishment of senior notes	  	 	—  	 	 	 	—  	 	 	 	5,459	  	
Other	  	 	(138	) 	 	 	(470	) 	 	 	1,682	  	
Changes in operating assets and liabilities	  	 	 	 	 	 	 	 	 	 	 	 	
Accounts receivable	  	 	10,634	  	 	 	(7,534	) 	 	 	(6,234	) 	
Inventories	  	 	(10,540	) 	 	 	(19,066	) 	 	 	4,274	  	
Other receivables	  	 	1,329	  	 	 	(458	) 	 	 	2,657	  	
Other current assets	  	 	11,606	  	 	 	10,944	  	 	 	(5,081	) 	
Deferred tax assets	  	 	(64,257	) 	 	 	(62,743	) 	 	 	1,412	  	
Accounts payable	  	 	(19,310	) 	 	 	(1,838	) 	 	 	18,084	  	
Other accounts payable	  	 	(8,485	) 	 	 	(9,185	) 	 	 	(6,891	) 	
Accrued expenses	  	 	10,651	  	 	 	24,412	  	 	 	(5,577	) 	
Other current liabilities	  	 	2,407	  	 	 	11,857	  	 	 	(3,050	) 	
Payment of severance benefits	  	 	(1,428	) 	 	 	(6,997	) 	 	 	(10,478	) 	
Other	  	 	(1,501	) 	 	 	(3,740	) 	 	 	(38	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	 	31,504	  	 	 	121,103	  	 	 	104,531	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flow from investing activities	  	 	 	 	 	 	 	 	 	 	 	 	
Decrease (increase) in restricted cash	  	 	9	  	 	 	6,783	  	 	 	(7,199	) 	
Proceeds from disposal of plant, property and equipment	  	 	—  	 	 	 	937	  	 	 	219	  	
Purchase of plant, property and equipment	  	 	(4,777	) 	 	 	(61,522	) 	 	 	(48,173	) 	
Payment for intellectual property registration	  	 	(130	) 	 	 	(882	) 	 	 	(696	) 	
Payment for acquisition	  	 	—  	 	 	 	(8,642	) 	 	 	—  	 	
Decrease in short-term financial instruments	  	 	—  	 	 	 	173	  	 	 	—  	 	
Collection of guarantee deposits	  	 	9	  	 	 	81	  	 	 	1,544	  	
Payment of guarantee deposits	  	 	(9	) 	 	 	(320	) 	 	 	(2,482	) 	
Other	  	 	(86	) 	 	 	(136	) 	 	 	(371	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in investing activities	  	 	(4,984	) 	 	 	(63,528	) 	 	 	(57,158	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flow from financing activities	  	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from issuance of common stock	  	 	526	  	 	 	962	  	 	 	9,336	  	
Repurchase of senior notes	  	 	—  	 	 	 	—  	 	 	 	(50,307	) 	
Repayment of obligations under capital lease	  	 	—  	 	 	 	(2,968	) 	 	 	(6,312	) 	
Acquisition of treasury stock	  	 	(5,188	) 	 	 	(28,125	) 	 	 	(11,793	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in financing activities	  	 	(4,662	) 	 	 	(30,131	) 	 	 	(59,076	) 	
Effect of exchange rates on cash and cash equivalents	  	 	(5,278	) 	 	 	(7,317	) 	 	 	1,642	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	  	 	16,580	  	 	 	20,127	  	 	 	(10,061	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	  	 	 	 	 	 	 	 	 	 	 	 	
Beginning of the period	  	 	165,658	  	 	 	162,111	  	 	 	172,172	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
End of the period	  	$	182,238	  	 	$	182,238	  	 	$	162,111