MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of US dollars)

(Unaudited)

Three Months
Ended

Year Ended

December 31,

2015

December 31,

2015

December 31,

2014

Cash flow from operating activities

Net income (loss)

$

22,854

$

(84,867)

$

(117,232)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating
   activities

Depreciation and amortization

6,424

26,490

29,989

Provision for severance benefits

1,116

15,289

17,703

Bad debt expenses (reversal of allowance)

18

(3)

3,718

Amortization of debt issuance costs and original issue discount

169

660

614

Loss (gain) on foreign currency, net

(18,746)

46,984

32,760

Gain on disposal of investments

—

—

(1,524)

Impairment charges

—

—

10,269

Stock-based compensation

398

2,768

2,072

Other

2,768

2,437

1,375

Changes in operating assets and liabilities

Accounts receivable, net

(5,373)

3,299

(1,668)

Inventories, net

1,627

12,929

(3,380)

Other receivables

(28,578)

(21,463)

(5,052)

Other current assets

10,670

11,339

9,308

Deferred tax assets

5

372

1,458

Accounts payable

6,289

(12,605)

(1,526)

Other accounts payable

(693)

(10,892)

(13,046)

Accrued expenses

31,052

(1,679)

208

Deferred revenue

9,372

8,136

(825)

Other current liabilities

160

(1,210)

2,004

Other non-current labilities

2,915

3,105

1,963

Payment of severance benefits

(3,489)

(11,394)

(6,650)

Other

187

328

(7)

Net cash provided by (used in) operating activities

39,145

(9,977)

(37,469)

Cash flow from investing activities

Proceeds from settlement of hedge collateral

—

10,841

—

Payment of hedge collateral

—

(17,182)

—

Proceeds from disposal of plant, property and equipment

7,504

9,886

20

Proceeds from disposal of investments

—

—

2,003

Purchase of plant, property and equipment

(2,100)

(6,350)

(17,419)

Payment for intellectual property registration

(192)

(742)

(958)

Collection of guarantee deposits

513

636

—

Payment of guarantee deposits

(5)

(675)

(323)

Other

16

195

(21)

Net cash provided by (used in) investing activities

5,736

(3,391)

(16,698)

Cash flow from financing activities

Proceeds from issuance of common stock

2

3,436

68

Net cash provided by financing activities

2

3,436

68

Effect of exchange rates on cash and cash equivalents

(22,511)

(1,620)

2,927

Net increase (decrease) in cash and cash equivalents

22,372

(11,552)

(51,172)

Cash and cash equivalents

Beginning of the period

68,510

102,434

153,606

End of the period

$

90,882

$

90,882

$

102,434