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

March 31,

2013

December 31,

2012

March 31,

2012

Net income (loss)

$

(7,405)

$

125,286

$

15,263

Adjustments:

Depreciation and amortization

8,522

8,550

7,474

Interest expense, net      

5,849

5,655

5,580

Income tax expense (benefit)

1,662

(61,304)

2,230

Restructuring and impairment charges

2,446

—

—

Stock-based compensation expense

420

546

458

Foreign currency loss (gain), net

22,558

(33,656)

(11,109)

Derivative valuation loss (gain), net

267

(634)

(85)

Secondary offering expense

669

—

—

Adjusted EBITDA

$

34,988

$

44,443

$

19,811

Adjusted EBITDA per common share:

- Diluted

$

0.94

$

1.20

$

0.52

Weighted average number of shares - Diluted

37,138,414

37,074,657

38,298,336

Net income (loss)

$

(7,405)

$

125,286

$

15,263

Adjustments:

Restructuring and impairment charges

2,446

—

—

Stock-based compensation expense

420

546

458

Amortization of intangibles

1,749

1,893

1,993

Foreign currency loss (gain), net

22,558

(33,656)

(11,109)

Derivative valuation loss (gain), net

267

(634)

(85)

Secondary offering expense

669

—

—

GAAP and cash tax expense difference

(998)

(64,749)

—

Adjusted net income

$

19,706

$

28,686

$

6,520

Adjusted net income per common share:

- Diluted

$

0.53

$

0.77

$

0.17

Weighted average number of shares - Diluted

37,138,414

37,074,657

38,298,336