Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2012

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheets

September 30, 2012

	MagnaChip Semiconductor Corporation (Parent)			Co-Issuers			Non- Guarantors			Guarantors			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	827		$	12,253		$	145,921		$	6,657		$	—		$	165,658
Restricted cash		—			—			136			—			—			136
Accounts receivable, net		—			—			149,507			22,328			(23,298	)		148,537
Inventories, net		—			—			75,020			—			—			75,020
Other receivables		399			36,276			7,790			364			(42,732	)		2,097
Prepaid expenses		102			—			11,580			335			(2,897	)		9,120
Other current assets		78,395			226,332			15,430			192,979			(493,866	)		19,270
Total current assets		79,723			274,861			405,384			222,663			(562,793	)		419,838
Property, plant and equipment, net		—			—			229,539			93			—			229,632
Intangible assets, net		—			—			16,524			160			—			16,684
Long-term prepaid expenses		—			—			13,639			—			(4,064	)		9,575
Investment in subsidiaries		(526,931	)		(608,299	)		—			(424,624	)		1,559,854			—
Long-term intercompany loan		697,125			787,364			—			638,690			(2,123,179	)		—
Other non-current assets		67			5,949			8,429			2,665			(66	)		17,044
Total assets	$	249,984		$	459,875		$	673,515		$	439,647		$	(1,130,248	)	$	692,773
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	—		$	—		$	119,220		$	1,143		$	(22,977	)	$	97,386
Other accounts payable		38,386			36			19,349			4,331			(43,053	)		19,049
Accrued expenses		174			87,682			219,323			227,170			(493,866	)		40,483
Derivative liabilities		—			—			1,818			—			—			1,818
Other current liabilities		4,040			—			3,243			4,072			(2,895	)		8,460
Total current liabilities		42,600			87,718			362,953			236,716			(562,791	)		167,196
Long-term borrowings, net		—			898,711			621,000			805,054			(2,123,179	)		201,586
Accrued severance benefits, net		—			—			104,867			184			—			105,051
Other non-current liabilities		—			—			9,261			6,426			(4,131	)		11,556
Total liabilities		42,600			986,429			1,098,081			1,048,380			(2,690,101	)		485,389
Commitments and contingencies
Stockholders’ equity
Common stock		395			136,229			39,005			51,976			(227,210	)		395
Additional paid-in capital		100,834			(731,689	)		(535,358	)		(729,663	)		1,996,710			100,834
Retained earnings		161,965			89,985			96,017			90,215			(276,217	)		161,965
Treasury stock		(34,730	)		—			—			—			—			(34,730	)
Accumulated other comprehensive loss		(21,080	)		(21,079	)		(24,230	)		(21,261	)		66,570			(21,080	)
Total stockholders’ equity		207,384			(526,554	)		(424,566	)		(608,733	)		1,559,853			207,384
Total liabilities and stockholders’ equity	$	249,984		$	459,875		$	673,515		$	439,647		$	(1,130,248	)	$	692,773

Condensed Consolidating Balance Sheets

December 31, 2011

	MagnaChip Semiconductor Corporation (Parent)			Co-Issuers			Non- Guarantors			Guarantors			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	1,677		$	25,119		$	127,118		$	8,197		$	—		$	162,111
Restricted cash		—			—			6,830			—			—			6,830
Accounts receivable, net		—			—			126,391			22,179			(22,648	)		125,922
Inventories, net		—			—			62,836			158			(158	)		62,836
Other receivables		1			11,793			7,581			399			(19,518	)		256
Prepaid expenses		34			2			8,509			384			(2,897	)		6,032
Other current assets		58,636			188,018			11,738			183,685			(426,168	)		15,909
Total current assets		60,348			224,932			351,003			215,002			(471,389	)		379,896
Property, plant and equipment, net		—			—			182,583			80			—			182,663
Intangible assets, net		—			—			16,514			273			—			16,787
Long-term prepaid expenses		—			—			10,963			66			(6,239	)		4,790
Investment in subsidiaries		(576,642	)		(655,845	)		—			(481,478	)		1,713,965			—
Long-term intercompany loan		697,125			809,913			—			660,066			(2,167,104	)		—
Other non-current assets		—			6,505			8,170			3,864			—			18,539
Total assets	$	180,831		$	385,505		$	569,233		$	397,873		$	(930,767	)	$	602,675
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	—		$	—		$	99,560		$	842		$	(22,554	)	$	77,848
Other accounts payable		13,659			1			13,115			6,195			(19,518	)		13,452
Accrued expenses		502			63,033			186,678			207,770			(426,260	)		31,723
Current portion of capital lease obligations		—			—			2,852			—			—			2,852
Other current liabilities		—			1			11,544			3,117			(2,898	)		11,764
Total current liabilities		14,161			63,035			313,749			217,924			(471,230	)		137,639
Long-term borrowings, net		—			898,514			642,383			827,596			(2,167,104	)		201,389
Accrued severance benefits, net		—			—			90,611			144			—			90,755
Other non-current liabilities		—			—			3,894			8,567			(6,239	)		6,222
Total liabilities		14,161			961,549			1,050,637			1,054,231			(2,644,573	)		436,005
Commitments and contingencies
Stockholders’ equity
Common stock		394			136,229			39,005			51,976			(227,210	)		394
Additional paid-in capital		98,929			(733,223	)		(536,894	)		(731,209	)		2,001,326			98,929
Retained earnings		93,950			35,760			35,141			37,722			(108,623	)		93,950
Treasury stock		(11,793	)		—			—			—			—			(11,793	)
Accumulated other comprehensive loss		(14,810	)		(14,810	)		(18,656	)		(14,847	)		48,313			(14,810	)
Total stockholders’ equity		166,670			(576,044	)		(481,404	)		(656,358	)		1,713,806			166,670
Total liabilities and stockholders’ equity	$	180,831		$	385,505		$	569,233		$	397,873		$	(930,767	)	$	602,675

Condensed Consolidating Statements of Comprehensive Income

Condensed Consolidating Statements of Comprehensive Income

For the three months ended September 30, 2012

	MagnaChip Semiconductor Corporation (Parent)			Co-Issuers			Non-Guarantors		Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	221,971	$	5,166		$	(5,265	)	$	221,872
Cost of sales		—			—			145,431		449			(448	)		145,432
Gross profit		—			—			76,540		4,717			(4,817	)		76,440
Selling, general and administrative expenses		489			65			21,569		3,031			(3,766	)		21,388
Research and development expenses		—			—			20,052		469			(1,051	)		19,470
Operating income (loss)		(489	)		(65	)		34,919		1,217			—			35,582
Other income (expense)		8,100			7,892			12,301		(11,562	)		—			16,731
Income (loss) before income taxes, equity in earnings of related equity investment		7,611			7,827			47,220		(10,345	)		—			52,313
Income tax expenses		1,918			—			11		1,972			—			3,901
Income (loss) before equity in earnings of related investment		5,693			7,827			47,209		(12,317	)		—			48,412
Equity in earnings of related investment		42,719			34,817			—		47,209			(124,745	)		—
Net income	$	48,412		$	42,644		$	47,209	$	34,892		$	(124,745	)	$	48,412
Comprehensive income	$	42,031		$	36,264		$	40,257	$	28,507		$	(105,028	)	$	42,031

Condensed Consolidating Statements of Comprehensive Income

For the nine months ended September 30, 2012

	MagnaChip Semiconductor Corporation (Parent)			Co-Issuers			Non-Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	601,742		$	14,781		$	(15,015	)	$	601,508
Cost of sales		—			—			412,292			1,050			(1,047	)		412,295
Gross profit		—			—			189,450			13,731			(13,968	)		189,213
Selling, general and administrative expenses		2,586			118			58,681			9,171			(10,866	)		59,690
Research and development expenses		—			—			61,164			1,001			(3,102	)		59,063
Operating income (loss)		(2,586	)		(118	)		69,605			3,559			—			70,460
Other income (expense)		19,315			1,891			(8,061	)		(6,300	)		—			6,845
Income (loss) before income taxes, equity in earnings of related equity investment		16,729			1,773			61,544			(2,741	)		—			77,305
Income tax expenses (benefits)		3,531			(170	)		288			5,641			—			9,290
Income (loss) before equity in earnings of related investment		13,198			1,943			61,256			(8,382	)		—			68,015
Equity in earnings of related investment		54,817			52,661			—			61,255			(168,733	)		—
Net income	$	68,015		$	54,604		$	61,256		$	52,873		$	(168,733	)	$	68,015
Comprehensive income	$	61,745		$	48,335		$	55,682		$	46,459		$	(150,476	)	$	61,745

Condensed Consolidating Statements of Comprehensive Income

For the three months ended September 30, 2011

	MagnaChip Semiconductor Corporation (Parent)			Co-Issuers			Non-Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	200,405		$	6,692		$	(6,692	)	$	200,405
Cost of sales		—			—			140,291			780			(787	)		140,284
Gross profit		—			—			60,114			5,912			(5,905	)		60,121
Selling, general and administrative expenses		354			24			17,946			3,144			(3,587	)		17,881
Research and development expenses		—			—			19,846			1,470			(2,313	)		19,003
Restructuring and impairment charges		—			—			1,610			11			—			1,621
Operating income (loss)		(354	)		(24	)		20,712			1,287			(5	)		21,616
Other income (expense)		—			(3,774	)		(82,121	)		10,062			—			(75,833	)
Income (loss) before income taxes, equity in loss of related equity investment		(354	)		(3,798	)		(61,409	)		11,349			(5	)		(54,217	)
Income tax expenses (benefits)		(1,456	)		—			(661	)		3,910			—			1,793
Income (loss) before equity in loss of related investment		1,102			(3,798	)		(60,748	)		7,439			(5	)		(56,010	)
Equity in loss of related investment		(57,112	)		(53,031	)		—			(60,753	)		170,896			—
Net loss	$	(56,010	)	$	(56,829	)	$	(60,748	)	$	(53,314	)	$	170,891		$	(56,010	)
Comprehensive income	$	(30,190	)	$	(31,009	)	$	(35,889	)	$	(27,495	)	$	94,393		$	(30,190	)

Condensed Consolidating Statements of Comprehensive Income

For the nine months ended September 30, 2011

	MagnaChip Semiconductor Corporation (Parent)			Co-Issuers			Non-Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	591,967		$	19,439		$	(19,401	)	$	592,005
Cost of sales		—			—			409,250			1,392			(1,414	)		409,228
Gross profit		—			—			182,717			18,047			(17,987	)		182,777
Selling, general and administrative expenses		1,650			610			49,740			9,731			(10,991	)		50,740
Research and development expenses		—			—			60,538			4,561			(6,984	)		58,115
Restructuring and impairment charges		—			—			2,409			1,687			—			4,096
IPO incentive		—			—			11,355			791			—			12,146
Operating income (loss)		(1,650	)		(610	)		58,675			1,277			(12	)		57,680
Other income (expense)		1			28,262			(71,531	)		(10,186	)		—			(53,454	)
Income (loss) before income taxes, equity in loss of related equity investment		(1,649	)		27,652			(12,856	)		(8,909	)		(12	)		4,226
Income tax expenses (benefits)		(1,474	)		—			532			7,080			—			6,138
Income (loss) before equity in loss of related investment		(175	)		27,652			(13,388	)		(15,989	)		(12	)		(1,912	)
Equity in loss of related investment		(1,737	)		(29,153	)		—			(13,400	)		44,290			—
Net loss	$	(1,912	)	$	(1,501	)	$	(13,388	)	$	(29,389	)	$	44,278		$	(1,912	)
Comprehensive income	$	(5,639	)	$	(5,228	)	$	(17,926	)	$	(33,136	)	$	56,290		$	(5,639	)

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statements of Cash Flows

For the nine months ended September 30, 2012

	MagnaChip Semiconductor Corporation (Parent)			Co-Issuers			Non-Guarantors			Guarantors			Eliminations			Consolidated
Cash flow from operating activities
Net income	$	68,015		$	54,604		$	61,256		$	52,873		$	(168,733	)	$	68,015
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization		—			—			23,704			136			—			23,840
Provision for severance benefits		—			—			16,740			39			—			16,779
Amortization of debt issuance costs and original issue discount		—			753			—			—			—			753
Loss (gain) on foreign currency translation, net		(158	)		724			(25,380	)		(490	)		—			(25,304	)
Loss (gain) on disposal of property, plant and equipment, net		—			—			(191	)		17			—			(174	)
Loss on disposal of intangible assets, net		—			—			26			—			—			26
Stock-based compensation		(95	)		—			1,536			9			—			1,450
Equity in earnings of related investment		(54,817	)		(52,661	)		—			(61,255	)		168,733			—
Other		—			2			(340	)		6			—			(332	)
Changes in operating assets and liabilities
Accounts receivable, net		—			—			(18,614	)		(205	)		651			(18,168	)
Inventories, net		—			—			(8,526	)		—			—			(8,526	)
Other receivables		1			(24,483	)		(549	)		31			23,213			(1,787	)
Other current assets		(19,667	)		(38,313	)		(729	)		(29,003	)		87,050			(662	)
Deferred tax assets		—			—			—			1,514			—			1,514
Accounts payable		—			—			17,594			301			(423	)		17,472
Other accounts payable		24,727			35			(52	)		(1,875	)		(23,535	)		(700	)
Accrued expenses		(325	)		24,490			37,814			38,739			(86,957	)		13,761
Other current liabilities		4,041			—			1,390			4,019			—			9,450
Payment of severance benefits		—			—			(5,569	)		—			—			(5,569	)
Other		(71	)		—			3,587			(6,073	)		318			(2,239	)
Net cash provided by (used in) operating activities		21,651			(34,849	)		103,697			(1,217	)		317			89,599
Cash flows from investing activities
Decrease in restricted cash		—			—			6,774			—			—			6,774
Proceeds from disposal of plant, property and equipment		—			—			937			—			—			937
Purchases of plant, property and equipment		—			—			(56,694	)		(51	)		—			(56,745	)
Payment for intellectual property registration		—			—			(752	)		—			—			(752	)

	MagnaChip Semiconductor Corporation (Parent)			Co-Issuers			Non-Guarantors			Guarantors			Eliminations			Consolidated
Payment for purchase of Dawin, net of cash acquired		—			—			(8,642	)		—			—			(8,642	)
Decrease in short-term financial instruments		—			—			173			—			—			173
Collection of guarantee deposits		—			—			42			30			—			72
Payment of guarantee deposits		—			—			(309	)		(2	)		—			(311	)
Other		—			21,983			(41	)		21,373			(43,365	)		(50	)
Net cash provided by (used in) investing activities		—			21,983			(58,512	)		21,350			(43,365	)		(58,544	)
Cash flow from financing activities
Proceeds from issuance of common stock		436			—			—			—			—			436
Repayment of long-term intercompany borrowings		—			—			(21,746	)		(21,983	)		43,729			—
Repayment of obligations under capital lease		—			—			(2,968	)		—			—			(2,968	)
Acquisition of treasury stock		(22,937	)		—			—			—			—			(22,937	)
Net cash used in financing activities		(22,501	)		—			(24,714	)		(21,983	)		43,729			(25,469	)
Effect of exchange rates on cash and cash equivalents		—			—			(1,668	)		310			(681	)		(2,039	)
Net increase (decrease) in cash and cash equivalents		(850	)		(12,866	)		18,803			(1,540	)		—			3,547
Cash and cash equivalents
Beginning of the period		1,677			25,119			127,118			8,197			—			162,111
End of the period	$	827		$	12,253		$	145,921		$	6,657		$	—		$	165,658

Condensed Consolidating Statements of Cash Flows

For the nine months ended September 30, 2011

	MagnaChip Semiconductor Corporation (Parent)			Co-Issuers			Non-Guarantors			Guarantors			Eliminations			Consolidated
Cash flow from operating activities
Net loss	$	(1,912	)	$	(1,501	)	$	(13,388	)	$	(29,389	)	$	44,278		$	(1,912	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		—			—			42,161			207			—			42,368
Provision for severance benefits		—			—			12,959			178			—			13,137
Amortization of debt issuance costs		—			728			—			—			—			728
Loss (gain) on foreign currency translation, net		—			(3,696	)		31,387			5,529			—			33,220
Gain on disposal of property, plant and equipment		—			—			(15	)		—			—			(15	)
Loss on disposal of intangible assets, net		—			—			17			—			—			17
Restructuring and impairment charges		—			—			2,410			1,687			(1	)		4,096
Stock-based compensation		178			—			1,442			470			(292	)		1,798
Equity in loss of related investment		1,737			29,153			—			13,400			(44,290	)		—
Other		(1,474	)		5,461			1,133			1,845			(854	)		6,111
Changes in operating assets and liabilities
Accounts receivable, net		—			—			35,467			35,630			(75,497	)		(4,400	)
Inventories, net		—			—			(4,413	)		—			13			(4,400	)
Other receivables		706			718			11,349			2,563			(14,500	)		836
Other current assets		194			(48,027	)		(1,977	)		(41,859	)		88,473			(3,196	)
Deferred tax assets		—			—			—			1,051			432			1,483
Accounts payable		—			—			(19,617	)		(40,821	)		75,510			15,072
Other accounts payable		(7,041	)		(8,555	)		4,966			3,287			14,500			7,157
Accrued expenses		106			3,987			18,065			48,050			(88,486	)		(18,278	)
Other current liabilities		—			—			(252	)		(957	)		—			(1,209	)
Payment of severance benefits		—			—			(6,510	)		(39	)		—			(6,549	)
Other		—			—			2,681			(2,988	)		448			141
Net cash provided by (used in) operating activities		(7,506	)		(21,732	)		117,865			(2,156	)		(266	)		86,205
Cash flows from investing activities
Increase in restricted cash		—			—			(9,711	)								(9,711	)
Decrease in short-term loans		—			51,132			19			38,452			(89,828	)		(225	)
Proceeds from disposal of plant, property and equipment		—			—			29			—			—			29
Purchases of plant, property and equipment		—			—			(42,911	)		(34	)		—			(42,945	)
Payment for intellectual property registration		—			—			(521	)		—			—			(521	)

	MagnaChip Semiconductor Corporation (Parent)		Co-Issuers			Non-Guarantors			Guarantors			Eliminations			Consolidated
Collection of guarantee deposits		—		—			979			5			—			984
Payment of guarantee deposits		—		—			(2,479	)		(10	)		—			(2,489	)
Other		—		—			(400	)		—			—			(400	)
Net cash provided by (used in) investing activities		—		51,132			(54,995	)		38,413			(89,828	)		(55,278	)
Cash flow from financing activities
Proceeds from issuance of common stock		8,835		—			—			—			—			8,835
Repayment of long-term borrowings		—		(50,307	)		(53,331	)		(38,466	)		91,797			(50,307	)
Repayment of obligations under capital lease		—		—			(4,607	)		(224	)		—			(4,831	)
Net cash provided by (used in) financing activities		8,835		(50,307	)		(57,938	)		(38,690	)		91,797			(46,303	)
Effect of exchange rates on cash and cash equivalents		—		—			4,042			333			(1,703	)		2,672
Net increase (decrease) in cash and cash equivalents		1,329		(20,907	)		8,974			(2,100	)		—			(12,704	)
Cash and cash equivalents
Beginning of the period		79		46,595			112,370			13,128			—			172,172
End of the period	$	1,408	$	25,688		$	121,344		$	11,028		$	—		$	159,468