Amkor Technology Reports Financial Results for the Fourth

Amkor Technology Reports Financial Results for the Fourth Quarter and Full Year 2020

In this press release, 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, and our ability to service debt, and our ability to fund capital expenditures and pay dividends. 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:
	2020			2019
	(in millions)
Free Cash Flow Data:
Net cash provided by operating activities	$	770		$	564
Less: Purchases of property, plant and equipment	(553		)	(472		)
Plus: Proceeds from sale of and insurance recovery for property, plant and equipment	4			12
Free cash flow	$	221		$	104

AMKOR TECHNOLOGY, INC.
Selected Operating Data

This press release also includes net debt, which is not defined by U.S. GAAP. We define net debt as total debt as reported on the consolidated balance sheet less the sum of cash and cash equivalents, and short term investments. We believe net debt to be relevant and useful information to our investors because it provides them with additional information in assessing our capital structure, financial leverage, and our ability to reduce debt and to fund investing and financing activities. This measure should be considered in addition to, and not as a substitute for, or superior to, total debt, prepared in accordance with U.S. GAAP. Furthermore, our definition of net debt may not be comparable to similarly titled measures reported by other companies.

Non-GAAP Financial Measure Reconciliation:
	2020			2019
	(in millions)
Net Debt Data:
Total Debt	$	1,154		$	1,450
Less: Cash and Cash Equivalents	(698		)	(895		)
Less: Short-term Investments	(134		)	(6		)
Net Debt	$	322		$	549

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

	For the Three Months Ended December 31,						For the Year Ended December 31,
	2020			2019			2020			2019
	(In thousands, except per share data)
Net sales	$	1,371,041		$	1,178,464		$	5,050,589		$	4,052,650
Cost of sales	1,092,540			955,480			4,149,775			3,403,211
Gross profit	278,501			222,984			900,814			649,439
Selling, general and administrative	78,219			71,828			302,842			278,631
Research and development	41,103			32,771			140,727			137,638
Total operating expenses	119,322			104,599			443,569			416,269
Operating income	159,179			118,385			457,245			233,170
Interest expense	14,707			16,673			64,168			71,587
Other (income) expense, net	4,828			1,132			6,395			1,773
Total other expense, net	19,535			17,805			70,563			73,360
Income before taxes	139,644			100,580			386,682			159,810
Income tax expense	12,679			764			46,183			37,182
Net income	126,965			99,816			340,499			122,628
Net income attributable to noncontrolling interests	(291		)	(669		)	(2,361		)	(1,740		)
Net income attributable to Amkor	$	126,674		$	99,147		$	338,138		$	120,888

Net income attributable to Amkor per common share:
Basic	$	0.52		$	0.41		$	1.40		$	0.50
Diluted	$	0.52		$	0.41		$	1.40		$	0.50
Shares used in computing per common share amounts:
Basic	242,333			240,384			241,509			239,725
Diluted	243,356			241,146			242,248			240,122

AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)

	December 31,
	2020			2019
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	698,002		$	894,948
Restricted cash	1,007			610
Short-term investments	133,769			6,348
Accounts receivable, net of allowances	962,643			850,753
Inventories	297,293			220,602
Other current assets	40,218			28,272
Total current assets	2,132,932			2,001,533
Property, plant and equipment, net	2,566,002			2,404,850
Operating lease right of use assets	147,236			148,549
Goodwill	27,325			25,976
Restricted cash	3,188			2,974
Other assets	145,628			111,733
Total assets	$	5,022,311		$	4,695,615

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	149,007		$	144,479
Trade accounts payable	636,434			571,054
Capital expenditures payable	181,339			77,044
Accrued expenses	349,207			267,226
Total current liabilities	1,315,987			1,059,803
Long-term debt	1,005,339			1,305,755
Pension and severance obligations	159,610			176,971
Long-term operating lease liabilities	84,420			91,107
Other non-current liabilities	102,996			71,740
Total liabilities	2,668,352			2,705,376

Amkor stockholders’ equity:
Preferred stock	—			—
Common stock	289			287
Additional paid-in capital	1,953,378			1,927,739
Retained earnings	562,502			234,077
Accumulated other comprehensive income	27,270			19,115
Treasury stock	(217,740		)	(217,479		)
Total Amkor stockholders’ equity	2,325,699			1,963,739
Noncontrolling interests in subsidiaries	28,260			26,500
Total equity	2,353,959			1,990,239
Total liabilities and equity	$	5,022,311		$	4,695,615

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

	For the Year Ended December 31,
	2020			2019
	(In thousands)
Cash flows from operating activities:
Net income	$	340,499		$	122,628
Depreciation and amortization	510,396			524,177
Other operating activities and non-cash items	12,594			42,935
Changes in assets and liabilities	(93,456		)	(125,890		)
Net cash provided by operating activities	770,033			563,850

Cash flows from investing activities:
Payments for property, plant and equipment	(553,021		)	(472,433		)
Proceeds from sale of property, plant and equipment	3,819			10,117
Proceeds from insurance recovery for property, plant and equipment	—			1,538
Payments for short-term investments	(535,368		)	(5,935		)
Proceeds from sale of short-term investments	247,081			—
Proceeds from maturities of short-term investments	159,015			6,469
Other investing activities	39,769			(2,245		)
Net cash used in investing activities	(638,705		)	(462,489		)

Cash flows from financing activities:
Proceeds from revolving credit facilities	312,000			272,700
Payments of revolving credit facilities	(332,000		)	(272,700		)
Proceeds from short-term debt	86,769			51,434
Payments of short-term debt	(87,353		)	(52,635		)
Proceeds from issuance of long-term debt	331,033			975,575
Payments of long-term debt	(648,514		)	(862,927		)
Payments of finance lease obligations	(9,851		)	(6,574		)
Other financing activities	14,197			3,377
Net cash (used in) provided by financing activities	(333,719		)	108,250

Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash	6,056			870

Net (decrease) increase in cash, cash equivalents and restricted cash	(196,335		)	210,481
Cash, cash equivalents and restricted cash, beginning of period	898,532			688,051
Cash, cash equivalents and restricted cash, end of period	$	702,197		$	898,532

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