Amkor Technology Reports Financial Results for the Third Quarter

Amkor Technology Reports Financial Results for the Third Quarter 2017

In the press release above we refer to free cash flow, which is not defined by U.S. GAAP. We define free cash flow as net cash provided by operating activities less payments for property, plant and equipment, plus proceeds from the sale of and insurance recovery for property, plant and equipment, if applicable. We believe free cash flow to be relevant and useful information to our investors because it provides them with additional information in assessing our liquidity, capital resources and financial operating results. Our management uses free cash flow in evaluating our liquidity, our ability to service debt and our ability to fund capital expenditures. However, free cash flow has certain limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other, non-discretionary expenditures, such as mandatory debt service, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. This measure should be considered in addition to, and not as a substitute for, or superior to, other measures of liquidity or financial performance prepared in accordance with U.S. GAAP, such as net cash provided by operating activities. Furthermore, our definition of free cash flow may not be comparable to similarly titled measures reported by other companies. Below is our reconciliation of free cash flow to U.S. GAAP net cash provided by operating activities.


Non-GAAP Financial Measures Reconciliation:
	Q3 2017			Q2 2017			Q3 2016
	(in millions)
Free Cash Flow Data:
Net cash provided by operating activities	$	214		$	97		$	219
Less: Purchases of property, plant and equipment	(142		)	(183		)	(126		)
Plus: Proceeds from sale of property, plant and equipment	2			129			13
Free cash flow	$	74		$	43		$	106


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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	(In thousands, except per share data)
Net sales	$	1,135,027		$	1,086,014		$	3,038,074		$	2,872,022
Cost of sales	918,389			872,214			2,506,295			2,403,732
Gross profit	216,638			213,800			531,779			468,290
Selling, general and administrative	75,567			72,363			220,045			216,894
Research and development	42,834			26,822			128,658			84,145
Gain on sale of real estate	—			—			(108,109		)	—
Total operating expenses	118,401			99,185			240,594			301,039
Operating income	98,237			114,615			291,185			167,251
Interest expense	20,321			21,488			63,733			58,496
Interest expense, related party	180			1,243			1,715			3,727
Other (income) expense, net	3,354			6,657			11,028			9,607
Total other expense, net	23,855			29,388			76,476			71,830
Income before taxes	74,382			85,227			214,709			95,421
Income tax expense	18,752			24,086			51,764			29,319
Net income	55,630			61,141			162,945			66,102
Net income attributable to non-controlling interests	(1,195		)	(1,052		)	(3,009		)	(2,175		)
Net income attributable to Amkor	$	54,435		$	60,089		$	159,936		$	63,927

Net income attributable to Amkor per common share:
Basic	$	0.23		$	0.25		$	0.67		$	0.27
Diluted	$	0.23		$	0.25		$	0.67		$	0.27

Shares used in computing per common share amounts:
Basic	239,068			237,353			238,873			237,157
Diluted	239,640			238,192			239,610			237,586


AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	September 30, 2017			December 31, 2016
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	519,449		$	549,518
Restricted cash	2,000			2,000
Accounts receivable, net of allowances	691,700			563,107
Inventories	314,207			267,990
Other current assets	39,116			27,081
Total current assets	1,566,472			1,409,696
Property, plant and equipment, net	2,706,715			2,564,648
Goodwill	25,076			24,122
Restricted cash	4,224			3,977
Other assets	109,782			89,643
Total assets	$	4,412,269		$	4,092,086
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	117,970		$	35,192
Trade accounts payable	562,330			487,430
Capital expenditures payable	289,780			144,370
Accrued expenses	385,659			338,669
Total current liabilities	1,355,739			1,005,661
Long-term debt	1,243,697			1,364,638
Long-term debt, related party	—			75,000
Pension and severance obligations	179,112			166,701
Other non-current liabilities	50,871			76,682
Total liabilities	2,829,419			2,688,682

Stockholders’ equity:
Preferred stock	—			—
Common stock	285			284
Additional paid-in capital	1,901,381			1,895,089
Accumulated deficit	(143,621		)	(303,557		)
Accumulated other comprehensive income (loss)	18,309			6,262
Treasury stock	(215,917		)	(214,490		)
Total Amkor stockholders’ equity	1,560,437			1,383,588
Non-controlling interests in subsidiaries	22,413			19,816
Total equity	1,582,850			1,403,404
Total liabilities and equity	$	4,412,269		$	4,092,086


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

	For the Nine Months Ended September 30,
	2017			2016
	(In thousands)
Cash flows from operating activities:
Net income	$	162,945		$	66,102
Depreciation and amortization	435,667			416,517
Gain on sale of real estate	(108,109		)	—
Other operating activities and non-cash items	(9,763		)	(4,382		)
Changes in assets and liabilities	(66,829		)	13,379
Net cash provided by operating activities	413,911			491,616
Cash flows from investing activities:
Payments for property, plant and equipment	(413,974		)	(481,670		)
Proceeds from sale of property, plant and equipment	133,320			13,687
Acquisition of business, net of cash acquired	(43,771		)	—
Other investing activities	(1,600		)	(143		)
Net cash used in investing activities	(326,025		)	(468,126		)
Cash flows from financing activities:
Proceeds from revolving credit facilities	75,000			115,000
Payments of revolving credit facilities	—			(155,000		)
Proceeds from short-term debt	50,333			27,594
Payments of short-term debt	(52,068		)	(36,211		)
Proceeds from issuance of long-term debt	223,976			45,000
Payments of long-term debt	(398,755		)	(12,955		)
Payments of long-term debt, related party	(17,837		)	—
Payment of deferred consideration for purchase of facility	(3,890		)	—
Payments of capital lease obligations	(4,123		)	(1,691		)
Other financing activities	425			1,585
Net cash used in financing activities	(126,939		)	(16,678		)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash	9,231			21,885
Net increase (decrease) in cash, cash equivalents and restricted cash	(29,822		)	28,697
Cash, cash equivalents and restricted cash, beginning of period	555,495			527,348
Cash, cash equivalents and restricted cash, end of period	$	525,673		$	556,045

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