MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED NET INCOME

(In thousands of US dollars, except share data)

(Unaudited)

Three Months Ended

Year Ended

December 31,

2018

September 30,

2018

December 31,

2017

December 31,

2018

December 31,

2017

Net income (loss)

$

(2,380)

$

17,222

$

43,653

$

(3,900)

$

84,936

Adjustments:

Interest expense, net

5,180

5,055

5,149

20,417

20,505

Income tax expenses (benefits)

530

1,608

(1,173)

4,649

1,155

Depreciation and amortization

8,165

7,913

7,457

32,048

28,146

EBITDA

11,495

31,798

55,086

53,214

134,742

Restructuring and other gain

—

—

—

—

(17,010)

Early termination charges

—

—

—

—

13,369

Equity-based compensation expense

1,320

1,083

722

4,409

2,336

Foreign currency loss (gain), net

4,315

(6,001)

(39,297)

24,445

(65,516)

Derivative valuation loss (gain), net

144

518

(436)

2,369

(236)

Restatement related expenses

—

—

4,319

(765)

10,306

Secondary offering expenses

—

—

154

—

669

Loss on early extinguishment of long-term borrowings, net

206

—

—

206

—

Other indemnification costs and reimbursement

(89)

473

—

384

—

Adjusted EBITDA

$

17,391

$

27,871

$

20,548

$

84,262

$

78,660

Net income (loss)

$

(2,380)

$

17,222

$

43,653

$

(3,900)

$

84,936

Adjustments:

Restructuring and other gain

—

—

—

—

(17,010)

Early termination charges

—

—

—

—

13,369

Equity-based compensation expense

1,320

1,083

722

4,409

2,336

Foreign currency loss (gain), net

4,315

(6,001)

(39,297)

24,445

(65,516)

Derivative valuation loss (gain), net

144

518

(436)

2,369

(236)

Restatement related expenses

—

—

4,319

(765)

10,306

Secondary offering expenses

—

—

154

—

669

Loss on early extinguishment of long-term borrowings, net

206

—

—

206

—

Other indemnification costs and reimbursements

(89)

473

—

384

—

Adjusted Net Income

$

3,516

$

13,295

$

9,115

$

27,148

$

28,854

Adjusted Net Income per common share:

- Basic

$

0.10

$

0.38

$

0.27

$

0.79

$

0.85

- Diluted

$

0.10

$

0.32

$

0.23

$

0.71

$

0.76

Weighted average number of shares – Basic

34,627,292

34,573,377

34,176,812

34,469,921

33,943,264

Weighted average number of shares – Diluted

35,128,341

46,021,610

45,573,889

45,941,853

44,755,137