*Advanced products include flip chip and wafer-level processing and related test services

**Mainstream products include wirebond packaging and related test services and since August 1, 2013, include the results of our newly acquired power discrete business in Malaysia which has a high volume of units relative to revenue

In the press release above we provide adjusted gross margin, adjusted net income and adjusted earnings per diluted share for the third quarter 2013. We present these non-GAAP amounts to demonstrate the impact of the loss contingency we recognized related to our pending patent license litigation. These measures have limitations, including that they exclude the charges for the arbitration panel award, which is an amount that the company may ultimately have to pay in cash. Furthermore, the final outcome of our litigation relating to the patent license dispute depends on a number of complex factors, including whether we receive favorable rulings in pending proceedings and other factors. Therefore, the final amount of the loss may be more than the amount we have recognized. Accordingly, these measures should be considered in addition to, and not as a substitute for, or superior to, net sales, gross margin, net income and earnings per diluted share prepared in accordance with U.S. GAAP. Below is the reconciliation of adjusted gross margin, adjusted net income and adjusted earnings per diluted share to U.S. GAAP gross margin, net income and earnings per diluted share.

Non-GAAP Financial Measures Reconciliation:
							Q3 2013
Gross margin							18.4			%
Plus: Loss contingency divided by net sales							1.3			%
Adjusted gross margin							19.7			%
							(In millions)
Net income							$	25
Plus: Loss contingency, net of tax							10
Adjusted net income							$	35
Earnings per diluted share							$	0.11
Plus: Loss contingency per diluted share							0.04
Adjusted earnings per diluted share							$	0.15

AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
		For the Three Months Ended September 30,									For the Nine Months Ended September 30,
		2014				2013					2014				2013
		(In thousands, except per share data)
Net sales		$	812,824			$	767,987				$	2,276,327			$	2,201,575
Cost of sales		659,607				626,979					1,843,576				1,807,235
Gross profit		153,217				141,008					432,751				394,340
Selling, general and administrative		61,600				64,347					191,698				189,524
Research and development		16,437				18,647					59,561				47,261
Total operating expenses		78,037				82,994					251,259				236,785
Operating income		75,180				58,014					181,492				157,555
Interest expense		23,780				26,104					70,039				71,921
Interest expense, related party		1,243				1,243					3,727				7,927
Other (income) expense, net		(9,626		)		(4,328		)			(15,289		)		6,326
Total other expense, net		15,397				23,019					58,477				86,174
Income before taxes and equity in earnings of unconsolidated affiliate		59,783				34,995					123,015				71,381
Income tax expense		14,985				12,170					32,425				5,961
Income before equity in earnings of unconsolidated affiliate		44,798				22,825					90,590				65,420
Equity in earnings of J-Devices		3,372				3,179					29,169				4,679
Net income		48,170				26,004					119,759				70,099
Net income attributable to noncontrolling interests		(1,073		)		(655		)			(2,508		)		(1,641		)
Net income attributable to Amkor		$	47,097			$	25,349				$	117,251			$	68,458
Net income attributable to Amkor per common share:
Basic		$	0.20			$	0.12				$	0.51			$	0.38
Diluted		$	0.20			$	0.11				$	0.50			$	0.33
Shares used in computing per common share amounts:
Basic		236,337				216,499					228,733				176,839
Diluted		237,509				235,143					236,672				235,119

AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
		September 30, 2014					December 31, 2013
		(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	485,592				$	610,442
Restricted cash		2,681					2,681
Accounts receivable, net of allowances		483,330					385,542
Inventories		229,557					200,423
Other current assets		69,225					33,328
Total current assets		1,270,385					1,232,416
Property, plant and equipment, net		2,258,870					2,006,553
Investments		128,444					105,214
Restricted cash		2,209					2,234
Other assets		100,033					80,881
Total assets		$	3,759,941				$	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		626,609					365,334
Accrued expenses		292,619					264,252
Total current liabilities		929,228					690,936
Long-term debt		1,450,969					1,516,390
Long-term debt, related party		75,000					75,000
Pension and severance obligations		158,793					165,073
Other non-current liabilities		14,881					14,959
Total liabilities		2,628,871					2,462,358
Amkor stockholders’ equity:
Preferred stock		—					—
Common stock		282					262
Additional paid-in capital		1,877,452					1,812,530
Accumulated deficit		(530,097		)			(647,348		)
Accumulated other comprehensive loss		(17,478		)			(255		)
Treasury stock		(212,797		)			(211,449		)
Total Amkor stockholders’ equity		1,117,362					953,740
Noncontrolling interests in subsidiaries		13,708					11,200
Total equity		1,131,070					964,940
Total liabilities and equity		$	3,759,941				$	3,427,298

AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		For the Nine Months Ended September 30,
		2014					2013
		(In thousands)
Cash flows from operating activities:
Net income		$	119,759				$	70,099
Depreciation and amortization		340,089					302,007
Loss on debt retirement		—					11,619
Gain on sale of subsidiary to J-Devices		(9,155		)			—
Other operating activities and non-cash items		(27,811		)			(12,728		)
Changes in assets and liabilities		(17,214		)			4,248
Net cash provided by operating activities		405,668					375,245
Cash flows from investing activities:
Payments for property, plant and equipment		(442,308		)			(402,004		)
Proceeds from sale of property, plant and equipment		2,170					26,505
Acquisition of business, net of cash acquired		—					(41,865		)
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		)
Other investing activities		(389		)			(1,015		)
Net cash used in investing activities		(456,301		)			(476,908		)
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		—					(3,216		)
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		5,826					—
Payments of tax withholding for restricted shares		(1,348		)			(234		)
Net cash (used in) provided by financing activities		(74,285		)			277,931
Effect of exchange rate fluctuations on cash and cash equivalents		68					1,994
Net (decrease) increase in cash and cash equivalents		(124,850		)			178,262
Cash and cash equivalents, beginning of period		610,442					413,048
Cash and cash equivalents, end of period		$	485,592				$	591,310

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