MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of US dollars)

(Unaudited)

Three Months

Ended

Nine Months

Ended

September 30,

2018

September 30,

2018

September 30,

2017

Cash flows from operating activities

Net income (loss)

$

17,222

$

(1,520)

$

41,283

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

Depreciation and amortization

7,913

23,883

20,689

Provision for severance benefits

5,521

14,686

15,354

Amortization of debt issuance costs
 and original
 issue discount

550

1,623

1,464

Loss (gain) on foreign currency, net

(5,438)

26,931

(30,615)

Restructuring gain and other

—

—

(17,010)

Stock-based compensation

1,083

3,893

1,614

Other

(2,017)

(964)

459

Changes in operating assets and liabilities

Accounts receivable, net

(19,587)

(14,282)

(20,241)

Unbilled accounts receivable

300

1,187

—

Inventories, net

(13,499)

(30,296)

3,281

Other receivables

1,839

(2,669)

3,541

Other current assets

261

2,514

2,897

Accounts payable

21,887

17,414

178

Other accounts payable

(3,582)

(8,811)

(8,378)

Accrued expenses

(3,935)

(5,370)

(16,459)

Other current liabilities

773

1,533

(822)

Deferred revenue

(1,853)

3,560

(2,243)

Other non-current liabilities

(81)

1,035

283

Payment of severance benefits

(3,250)

(9,004)

(19,578)

Other

(845)

(329)

(11)

Net cash provided by (used in)
 operating activities

3,262

25,014

(24,314)

Cash flows from investing activities

Proceeds from settlement of hedge collateral

6,427

11,290

8,556

Payment of hedge collateral

(3,475)

(10,965)

(14,839)

Proceeds from disposal of plant, property and equipment

1,672

1,685

1,128

Purchase of plant, property and equipment

(7,443)

(18,875)

(19,269)

Payment for property related to water treatment
 facility arrangement

—

(4,283)

—

Payment for intellectual property registration

(202)

(776)

(977)

Collection of guarantee deposits

135

794

1,426

Payment of guarantee deposits

(89)

(89)

(41)

Other

—

(38)

24

Net cash used in investing activities

(2,975)

(21,257)

(23,992)

Cash flows from financing activities

Proceeds from issuance of senior notes

—

—

86,250

Payment of debt issuance costs

—

—

(5,902)

Proceeds from exercise of stock options

678

1,113

3,391

Acquisition of treasury stock

(199)

(199)

(11,401)

Proceeds from property related to water treatment
  facility arrangement

—

4,283

—

Repayment of financing related to water treatment
  facility arrangement

(73)

(73)

—

Net cash provided by financing activities

406

5,124

72,338

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

1,107

(3,974)

2,787

Net increase in cash, cash equivalents
 and restricted cash

1,800

4,907

26,819

Cash, cash equivalents and restricted cash

Beginning of the period

131,682

128,575

101,606

End of the period

133,482

133,482

128,425