Amkor Technology Reports Financial Results for the Second

Amkor Technology Reports Financial Results for the Second Quarter 2012

**Amkor's Board of Directors previously authorized $300 million for the repurchase of our common stock. During the second quarter, we repurchased 7.1 million shares of common stock for a purchase price of $33.2 million. As of June 30, 2012, we had repurchased a total of 36.7 million shares under the stock repurchase program for a purchase price of $166.6 million. From July 1, 2012, through July 25, 2012, we repurchased an additional 5.6 million shares for a purchase price of $27.1 million, for a cumulative total of 42.3 million shares for a purchase price of $193.7 million.

In the press release above we provide adjusted gross margin, adjusted net income and adjusted earnings per diluted share. We present these non-GAAP amounts to demonstrate the impact of the loss contingency accrual discussed above. However, these measures have limitations, including that they exclude the accrual for the arbitration panel award, which is an amount that the company may ultimately have to pay in cash. Furthermore, the factors affecting the calculation of the arbitration award are complex and subject to determination by the arbitration panel. Therefore, the final amount of the loss may be more than the amount of the current accrual. Accordingly, these measures that exclude the loss contingency accrual should be considered in addition to, and not as a substitute for, or superior to, gross margin, net income and earnings per diluted share prepared in accordance with U.S. GAAP. Below is the reconciliation of adjusted gross margin, adjusted net income and adjusted earnings per diluted share to U.S. GAAP gross margin, net income and earnings per diluted share.



		Q2 2012
Non-GAAP Reconciliation:
Gross margin		13		%
Plus: Loss contingency accrual divided by net sales		4		%
Adjusted gross margin		17		%

		Q2 2012
	(In millions)
Net income		$	1
Plus: Loss contingency accrual, net of tax		32
Adjusted net income		$	33

		Q2 2012
Earnings per diluted share		$	—
Plus: Loss contingency accrual per diluted share		0.13
Plus: Adjustment for dilutive effect of interest on 6.0% convertible notes due 2014, net of tax		0.02
Adjusted earnings per diluted share		$	0.15


AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2012			2011			2012			2011
	(In thousands, except per share data)
Net sales	$	686,527		$	687,633		$	1,341,537		$	1,352,583
Cost of sales	597,207			557,816			1,147,236			1,096,080
Gross profit	89,320			129,817			194,301			256,503
Operating expenses:
Selling, general and administrative	53,489			61,284			110,744			125,842
Research and development	13,867			12,559			27,292			24,688
Total operating expenses	67,356			73,843			138,036			150,530
Operating income	21,964			55,974			56,265			105,973
Other expense (income):
Interest expense	22,452			19,609			41,038			38,398
Interest expense, related party	3,492			2,830			6,984			5,410
Interest income	(828		)	(553		)	(1,717		)	(1,140		)
Foreign currency loss	1,277			2,932			2,067			4,663
Loss on debt retirement, net	—			15,531			—			15,531
Equity in earnings of unconsolidated affiliate	(892		)	(2,089		)	(2,880		)	(3,607		)
Other income, net	(518		)	(325		)	(1,152		)	(469		)
Total other expense, net	24,983			37,935			44,340			58,786
(Loss) income before income taxes	(3,019		)	18,039			11,925			47,187
Income tax (benefit) expense	(3,891		)	3,594			(529		)	6,976
Net income	872			14,445			12,454			40,211
Net (income) loss attributable to noncontrolling interests	(291		)	43			(99		)	(620		)
Net income attributable to Amkor	$	581		$	14,488		$	12,355		$	39,591

Net income attributable to Amkor per common share:
Basic	$	—		$	0.07		$	0.07		$	0.20
Diluted	$	—		$	0.07		$	0.07		$	0.17

Shares used in computing per common share amounts:
Basic	165,956			197,084			166,911			195,584
Diluted	166,009			280,009			167,012			278,810


AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)

	June 30, 2012			December 31, 2011
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	351,183		$	434,631
Restricted cash	2,680			2,680
Accounts receivable:
Trade, net of allowances	352,453			298,543
Other	18,632			27,197
Inventories	205,778			198,427
Other current assets	41,573			35,352
Total current assets	972,299			996,830
Property, plant and equipment, net	1,751,629			1,656,214
Intangibles, net	6,436			8,382
Investments	38,822			36,707
Restricted cash	2,214			4,001
Other assets	73,784			70,913
Total assets	$	2,845,184		$	2,773,047

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	69,358		$	59,395
Trade accounts payable	448,235			424,504
Accrued expenses	190,657			158,287
Total current liabilities	708,250			642,186
Long-term debt	1,085,545			1,062,256
Long-term debt, related party	225,000			225,000
Pension and severance obligations	130,993			129,096
Other non-current liabilities	18,129			13,288
Total liabilities	2,167,917			2,071,826
Equity:
Amkor stockholders' equity:
Preferred stock	—			—
Common stock	198			197
Additional paid-in capital	1,612,840			1,611,242
Accumulated deficit	(786,107		)	(798,462		)
Accumulated other comprehensive income	11,122			10,849
Treasury stock	(168,840		)	(130,560		)
Total Amkor stockholders' equity	669,213			693,266
Noncontrolling interests in subsidiaries	8,054			7,955
Total equity	677,267			701,221
Total liabilities and equity	$	2,845,184		$	2,773,047


AMKOR TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	For the Six Months Ended June 30,
	2012			2011
	(In thousands)
Cash flows from operating activities:
Net income	$	12,454		$	40,211
Depreciation and amortization	179,182			166,468
Loss on debt retirement, net	—			10,557
Other operating activities and non-cash items	(1,881		)	3,648
Changes in assets and liabilities	(47,292		)	13,013
Net cash provided by operating activities	142,463			233,897

Cash flows from investing activities:
Purchases of property, plant and equipment	(232,682		)	(224,629		)
Proceeds from the sale of property, plant and equipment	998			14,643
Financing lease payment from unconsolidated affiliate	9,688			5,991
Other investing activities	1,533			(4,014		)
Net cash used in investing activities	(220,463		)	(208,009		)

Cash flows from financing activities:
Borrowings under short-term credit facilities	30,000			20,000
Payments under short-term credit facilities	(20,000		)	(15,000		)
Proceeds from issuance of long-term debt	187,528			325,000
Proceeds from issuance of long-term debt, related party	—			75,000
Payments of long-term debt	(165,165		)	(354,693		)
Payments for debt issuance costs	(823		)	(5,875		)
Payments for repurchase of common stock	(35,652		)	—
Proceeds from the issuance of stock through share-based compensation plans	162			907
Payments of tax withholding for restricted shares	(446		)	(744		)
Net cash (used in) provided by financing activities	(4,396		)	44,595

Effect of exchange rate fluctuations on cash and cash equivalents	(1,052		)	(10		)

Net (decrease) increase in cash and cash equivalents	(83,448		)	70,473
Cash and cash equivalents, beginning of period	434,631			404,998
Cash and cash equivalents, end of period	$	351,183		$	475,471

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