MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS)

(In thousands of US dollars, except share data)

(Unaudited)

Three Months Ended

Year Ended

December 31,

2015

September 30,

2015

December 31,

2014

December 31,

2015

December 31,

2014

Net income (loss)

$

22,854

$

(57,066)

$

(63,830)

$

(84,867)

$

(117,232)

Adjustments:

Depreciation and amortization

6,424

6,399

7,072

26,490

29,989

Interest expense, net

4,020

4,023

4,134

16,039

16,289

Income tax expenses (benefits)

(16,868)

1,250

(247)

(15,087)

1,523

Restructuring and impairment charges

—

—

10,269

—

10,269

Equity-based compensation expense

398

393

407

2,768

2,072

Foreign currency loss (gain), net

(17,080)

44,139

30,160

42,531

24,650

Derivative valuation loss (gain), net

(61)

270

(49)

516

12

Restatement related expenses

(891)

1,891

12,145

12,372

40,897

Adjusted EBITDA

$

(1,204)

$

1,299

$

61

$

762

$

8,469

Adjusted EBITDA per common share:

- Diluted

$

(0.03)

$

0.04

$

0.00

$

0.02

$

0.24

Weighted average number of shares—Diluted

34,698,777

35,002,896

35,006,862

34,663,593

35,172,755

Net income (loss)

$

22,854

$

(57,066)

$

(63,830)

$

(84,867)

$

(117,232)

Adjustments:

Restructuring and impairment charges

—

—

10,269

—

10,269

Equity-based compensation expense

398

393

407

2,768

2,072

Amortization of intangibles

—

—

120

—

1,221

Foreign currency loss (gain), net

(17,080)

44,139

30,160

42,531

24,650

Derivative valuation loss (gain), net

(61)

270

(49)

516

12

Restatement related expenses

(891)

1,891

12,145

12,372

40,897

Adjusted net income (loss)

$

5,220

$

(10,373)

$

(10,778)

$

(26,680)

$

(38,111)

Adjusted net income (loss) per common
   share:

- Diluted

$

0.15

$

(0.30)

$

(0.32)

$

(0.78)

$

(1.12)

Weighted average number of shares—Diluted

34,713,034

34,664,246

34,056,413

34,380,517

34,055,513