MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of US dollars)

(Unaudited)

Three Months Ended

March 31,

2018

March 31,

2017

Cash flows from operating activities

Net income

$

2,763

$

43,738

Adjustments to reconcile net income to net cash used in operating activities

Depreciation and amortization

7,958

6,758

Provision for severance benefits

4,512

7,386

Amortization of debt issuance costs and original issue discount

532

446

Gain on foreign currency, net

(1,682)

(49,059)

Restructuring and other gain

—

(17,010)

Stock-based compensation

1,469

830

Other

(337)

1,185

Changes in operating assets and liabilities

Accounts receivable, net

3,115

(15,734)

Unbilled accounts receivable

(639)

—

Inventories, net

(13,150)

1,077

Other receivables

(3,746)

(296)

Other current assets

(1,071)

(1,155)

Accounts payable

3,168

1,814

Other accounts payable

(2,759)

(3,499)

Accrued expenses

(7,129)

(7,128)

Deferred revenue

4,809

(73)

Other current liabilities

(570)

(212)

Other non-current liabilities

618

(62)

Payment of severance benefits

(2,247)

(7,524)

Other

465

(162)

Net cash used in operating activities

(3,921)

(38,680)

Cash flows from investing activities

Proceeds from settlement of hedge collateral

4,863

2,164

Payment of hedge collateral

—

(4,452)

Proceeds from disposal of plant, property and equipment

—

581

Purchase of plant, property and equipment

(7,329)

(5,368)

Payment for intellectual property registration

(409)

(216)

Collection of guarantee deposits

14

295

Payment of guarantee deposits

—

(41)

Other

(36)

20

Net cash used in investing activities

(2,897)

(7,017)

Cash flows from financing activities

Proceeds from issuance of senior notes

—

86,250

Payment of debt issuance costs

—

(5,902)

Proceeds from issuance of common stock

142

1,689

Acquisition of treasury stock

—

(11,401)

Net cash provided by financing activities

142

70,636

Effect of exchange rates on cash, cash equivalents and restricted cash

1,237

6,082

Net increase (decrease) in cash, cash equivalents and restricted cash

(5,439)

31,021

Cash, cash equivalents and restricted cash

Beginning of the period

128,575

101,606

End of the period

$

123,136

$

132,627