Amkor Technology Reports Financial Results for the Second

Amkor Technology Reports Financial Results for the Second Quarter 2014

About Amkor

Amkor is a leading provider of semiconductor packaging and test services to semiconductor companies and electronics OEMs. More information about Amkor is available from the company's filings with the Securities and Exchange Commission and at Amkor's website: www.amkor.com.


AMKOR TECHNOLOGY, INC.
Selected Operating Data

Since the fourth quarter 2013, we have reported net sales data by the following categories: advanced products and mainstream products. We have also provided quarterly and annual net sales and packaged units for 2012 and 2013 under these revised net sales reporting categories at the Investor Relations section of our website at www.amkor.com.

	Q2 2014			Q1 2014			Q2 2013
Net Sales Data:
Net sales (in millions):
Advanced products*	$	364		$	302		$	387
Mainstream products**	403			394			359
Total net sales	$	767		$	696		$	746

Packaging services	86		%	85		%	87		%
Test services	14		%	15		%	13		%

Net sales from top ten customers	58		%	60		%	63		%

Packaged units (in millions):
Advanced products*	910			650			704
Mainstream products**	3,379			3,217			1,976
Total packaged units	4,289			3,867			2,680

End Market Distribution Data (an approximation including representative devices and applications based on a sampling of our largest customers) :
Communications (smart phones, tablets, handheld devices, wireless LAN)	53		%	53		%	58		%
Consumer (television, set top boxes, gaming, portable media, digital cameras)	15		%	15		%	14		%
Automotive, industrial and other (infotainment, safety, performance, comfort)	12		%	12		%	9		%
Networking (servers, routers, switches)	11		%	10		%	10		%
Computing (PCs, hard disk drive, printers, peripherals, servers)	9		%	10		%	9		%
Total	100		%	100		%	100		%

Gross Margin Data:
Net sales	100.0		%	100.0		%	100.0		%
Cost of sales:
Materials	37.2		%	36.8		%	41.7		%
Labor	14.0		%	14.7		%	14.0		%
Other manufacturing	29.2		%	30.0		%	25.8		%
Gross margin	19.6		%	18.5		%	18.5		%

Earnings per Share Data:
Net income attributable to Amkor - basic	$	50		$	20		$	30

Adjustment for dilutive securities on net income:
Interest on 6.0% convertible notes due 2014, net of tax	—			1			3
Net income attributable to Amkor - diluted	$	50		$	21		$	33

Weighted average shares outstanding - basic	233			216			161
Effect of dilutive securities:
Stock Options	1			—			—
6.0% convertible notes due 2014	3			19			74
Weighted average shares outstanding - diluted	237			235			235

Net income attributable to Amkor per common share:
Basic	$	0.21		$	0.09		$	0.18
Diluted	$	0.21		$	0.09		$	0.14

*Advanced products include flip chip and wafer-level processing and related test services
**Mainstream products include wirebond packaging and related test services and since July 1, 2013, include the results of our newly acquired power discrete business in Malaysia which has a high volume of units relative to revenue

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

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2014*			2013			2014*			2013
	(In thousands, except per share data)
Net sales	$	767,459		$	746,059		$	1,463,503		$	1,433,588
Cost of sales		616,745			607,680			1,183,969			1,180,256
Gross profit		150,714			138,379			279,534			253,332
Selling, general and administrative		67,674			65,618			130,098			125,177
Research and development		22,079			14,308			43,124			28,614
Total operating expenses		89,753			79,926			173,222			153,791
Operating income		60,961			58,453			106,312			99,541
Interest expense		22,537			23,739			46,259			45,817
Interest expense, related party		1,242			3,192			2,484			6,684
Other (income) expense, net		(5,699	)		12,876			(5,663	)		10,654
Total other expense, net		18,080			39,807			43,080			63,155
Income before taxes and equity in earnings of unconsolidated affiliate		42,881			18,646			63,232			36,386
Income tax expense (benefit)		12,511			(10,238	)		17,440			(6,209	)
Income before equity in earnings of unconsolidated affiliate		30,370			28,884			45,792			42,595
Equity in earnings of J-Devices		20,036			1,445			25,797			1,500
Net income		50,406			30,329			71,589			44,095
Net income attributable to noncontrolling interests		(885	)		(602	)		(1,435	)		(986	)
Net income attributable to Amkor	$	49,521		$	29,727		$	70,154 $			43,109

Net income attributable to Amkor per common share:
Basic	$	0.21		$	0.18		$	0.31 $			0.27
Diluted	$	0.21		$	0.14		$	0.30 $			0.21

Shares used in computing per common share amounts:
Basic		232,891			160,886			224,868			156,672
Diluted		236,872			235,111			236,182			235,099

*Net income for the three and six months ended June 30, 2014 includes a net gain of $18 million ($0.08 per diluted share) related to the sale of Amkor's Japanese subsidiary to J-Devices, its 60% owned joint venture in Japan. In connection with the sale, Amkor recognized $9 million principally from the realization of accumulated foreign currency translation gains (reflected in Other (income) expense, net) and an additional $9 million from its 60% equity interest in the gain realized by J-Devices on the transaction (reflected in Equity in earnings of J-Devices).

AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	June 30,			December 31,
	2014			2013
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	525,935		$	610,442
Restricted cash	2,681			2,681
Accounts receivable, net of allowances	455,838			385,542
Inventories	205,668			200,423
Other current assets	57,803			33,328
Total current assets	1,247,925			1,232,416
Property, plant and equipment, net	2,153,818			2,006,553
Investments	134,717			105,214
Restricted cash	2,247			2,234
Other assets	70,666			80,881
Total assets	$	3,609,373		$	3,427,298

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	10,000		$	61,350
Trade accounts payable	555,805			365,334
Accrued expenses	252,048			264,252
Total current liabilities	817,853			690,936
Long-term debt	1,451,111			1,516,390
Long-term debt, related party	75,000			75,000
Pension and severance obligations	159,936			165,073
Other non-current liabilities	14,423			14,959
Total liabilities	2,518,323			2,462,358

Amkor stockholders’ equity:
Preferred stock	—			—
Common stock	282			262
Additional paid-in capital	1,875,533			1,812,530
Accumulated deficit	(577,194		)	(647,348		)
Accumulated other comprehensive loss	(7,751		)	(255		)
Treasury stock	(212,455		)	(211,449		)
Total Amkor stockholders’ equity	1,078,415			953,740
Noncontrolling interests in subsidiaries	12,635			11,200
Total equity	1,091,050			964,940
Total liabilities and equity	$	3,609,373		$	3,427,298

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

	For the Six Months Ended
	June 30,
	2014			2013
	(In thousands)
Cash flows from operating activities:
Net income	$	71,589		$	44,095
Depreciation and amortization	220,389			195,785
Loss on debt retirement	—			11,619
Gain on sale of subsidiary to J-Devices	(9,155		)	—
Other operating activities and non-cash items	(24,000		)	(13,947		)
Changes in assets and liabilities	(23,570		)	(36,702		)
Net cash provided by operating activities	235,253			200,850

Cash flows from investing activities:
Payments for property, plant and equipment	(230,392		)	(222,674		)
Proceeds from sale of property, plant and equipment	1,634			25,093
Cash transferred on sale of subsidiary to J-Devices, net of proceeds	(15,774		)	—
Payments from J-Devices	—			8,843
Investment in J-Devices	—			(67,372		)
Purchase of short-term investment	(20,000		)	—
Proceeds from short-term investment	20,000			—
Other investing activities	(353		)	(2,032		)
Net cash used in investing activities	(244,885		)	(258,142		)

Cash flows from financing activities:
Borrowings under revolving credit facilities	—			5,000
Payments under revolving credit facilities	—			(5,000		)
Proceeds from issuance of long-term debt	80,000			293,000
Payments of long-term debt	(140,000		)	—
Payments for debt issuance costs	—			(3,357		)
Payments for the retirement of debt	—			(11,619		)
Payment of deferred consideration for an acquisition	(18,763		)	—
Proceeds from the issuance of stock through share-based compensation plans	4,826			—
Payments of tax withholding for restricted shares	(1,006		)	(172		)
Net cash (used in) provided by financing activities	(74,943		)	277,852

Effect of exchange rate fluctuations on cash and cash equivalents	68			2,399

Net (decrease) increase in cash and cash equivalents	(84,507		)	222,959
Cash and cash equivalents, beginning of period	610,442			413,048
Cash and cash equivalents, end of period	$	525,935		$	636,007

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