2. Restatement of Consolidated Financial Statements

Background and Scope of Investigation

In January 2014, the Audit Committee of the Company’s Board of Directors (the “Audit Committee”) commenced an internal investigation into the Company’s accounting practices and procedures with outside professional advisors (the “Independent Investigation”). The Independent Investigation involved procedures that included forensic analysis and inquiry directed to aspects of the Company’s accounting and financial reporting practices, and evaluated aspects of its historical accounting and financial reporting practices since 2011. The Independent Investigation initially raised questions relating to numerous accounting transactions, most of which involved revenue recognition practices relating to the Company’s distributor relationships.

Based on initial findings and observations from the Independent Investigation regarding errors in the Company’s revenue recognition practices related to sales through distributors, the Company announced on March 11, 2014 that the Audit Committee concluded that the Company’s previously issued financial statements for each of the years ended December 31, 2012 and December 31, 2011 and the quarters ended March 31, June 30 and September 30 in 2013 and 2012 should no longer be relied upon.

The Independent Investigation continued through October 2014 and identified numerous accounting errors, most of which involved revenue recognition, cost of goods sold, inventory reserves, fixed asset capitalization, and expense recognition and allocation. It also identified deficiencies regarding business practices related to distributors, non-distributor customers and vendors. Concurrently with the Independent Investigation, management conducted extensive internal reviews of its financial accounting and reporting practices and internal control over financial reporting. The Independent Investigation and management’s internal review identified evidence of errors in the Company’s accounting and deficiencies in its internal control over financial reporting.

Restatement Adjustments

As a result of the issues identified in the Independent Investigation and the management’s internal review, the Company restated its previously reported consolidated financial statements for the years ended December 31, 2012 and 2011, including the stockholders’ equity balance as of January 1, 2011, in order to correct certain previously reported amounts.

The impact of the errors to the previous statements of operations, balance sheets and statements of cash flows has been detailed in the tables below. A description of the nature of the errors follows.

Revenue Recognition

Sales through Distributors—The largest portion of revenue recognition adjustments relate to correcting the timing and amount of revenue recognized on the sale of products through certain distributors. During the course of the Independent Investigation and management’s internal review, it was determined that the application of its revenue recognition policy was not appropriate in these situations. Revenue had been recognized without persuasive evidence of an arrangement and the collectability of the sales price not being reasonably assured. Furthermore, in some circumstances, revenue was recognized prior to risk of loss being transferred.

Accordingly, related revenues and cost of sales were reversed in the period in which the accounting errors took place and recognized in subsequent periods when all of the revenue recognition criteria were met. These adjustments also include the impact of foreign currency exchange rate differences between periods of de-recognition and recognition of the revenue transactions.

Other—The other revenue recognition adjustments include transactions where the Company recognized revenue in an incorrect period or recognized an incorrect amount of revenue. The primary categories of other revenue recognition adjustments include the following:

•

Unfinished Products—The Company identified recognition of revenues on unfinished or semi-finished products. These products were completed and shipped to the distributor or end customer after the related revenues were recognized.

•

Non-recurring Engineering (“NRE”)—The Company provides NRE services to develop prototype wafers mainly for the Company’s foundry service customers. The Company identified revenue related to certain NRE arrangements recognized earlier or later than at the time that the required prototype wafer was delivered.

•

Concessions—The Company identified various types of unrecorded concessions provided to its distributors and customers, including future discounts, price adjustments, free products and others to incentivize distributors and customers to make purchases. Such concessions should be recorded as a deduction from revenues at the time when the related revenues are recognized.

•

Direct Customer Sales—The Company identified certain sales transactions to a customer that were recognized when the products were taken from its manufacturing facility to warehouse, rather than when the products were delivered to the customer’s location. The arrangement related to these transactions did not have a fixed schedule for delivery to a customer’s location and were prematurely recognized as revenues.

Hedge Accounting—As a result of incorrect recognition of revenue discussed in Revenue Recognition—Sales through Distributors and Revenue Recognition—Other, the Company’s hedge accounting, related to the change in the effective portion of our derivative instrument’s gains and losses, was adjusted as key assumptions determining the amount are derived from revenues.

Reserves—As a result of incorrect recognition of revenue discussed in Revenue Recognition—Sales through Distributors and Revenue Recognition—Other, adjustments for reserves, related to estimated sales returns, low yield compensation, and warranty liabilities, also required corrections as key assumptions in determining these amounts are derived from revenues.

Manufacturing Cost—The Company corrected certain fabrication and back-end processing costs that were not recorded consistently with the progression of its manufacturing activities. As a result, the Company’s cost of sales were increased by approximately $2,600 thousand and decreased by approximately $1,600 thousand for the years ended December 31, 2012 and 2011, respectively, to account for manufacturing costs during the period in which they were incurred.

Inventory Reserves

The Company corrected errors with respect to how the Company previously forecasted revenues for the purposes of determining inventory reserves. As a result, the Company performed a retrospective review of its inventory reserve calculation and revised the revenue forecast component of the reserve calculation. In addition, as a result of the correction of revenue for certain transactions discussed in Revenue Recognition—Sales through Distributors and Revenue Recognition—Other, a significant portion of the revenues were reversed rather than deferred. The failure of the anticipated orders from final customers materializing resulted in a significantly higher excess and obsolete reserves for the restatement and subsequent periods. In addition, the Company corrected errors with respect to obsolete and aged inventory reserves that were previously understated due to the misclassification or errors in certain inventory items. Based on this review and revision of the reserve estimates, the Company has determined that it previously understated inventory reserves for the years ended December 31, 2012 and 2011.

Understated Employee Benefits

The Company identified that certain amounts of earned vacation were not included in calculating its severance accrual, resulting in an understatement of accrued severance benefits.

The Company also identified that vested compensation claims by employees who have rendered long-term services were accounted for on a cash basis rather than on an accrual basis, resulting in an understatement of long-term service liabilities.

Settlement Obligations

The Company identified certain cash and in-kind payments to a customer in connection with settling a claim involving products that may have caused a failure in the customer’s product. Although the Company does not agree with the claim, as its product met the customer’s specifications, the Company considered a number of factors and decided not to dispute the claim but make certain cash and in-kind payments as demanded by the customer. A number of cash and in-kind payments were made to the customer during the each of the years presented in Note 2 and were recorded as cost of sales and/or reduction of revenues at the time that they were paid rather than accrued when each cash or in-kind payment became probable.

Tax Matters

Income Tax—Realization of the deferred tax assets is dependent on the Company’s ability to generate future taxable income. In the previously reported consolidated financial statements for the year ended December 31, 2012, the Company had released $64,749 thousand of valuation allowance against deferred tax assets at the Company’s Korean subsidiary and, consequently, a corresponding amount of income tax benefit was recognized.

During the management’s internal review, key assumptions and forecast of future taxable income were reassessed based on restated financial data as to whether deferred tax assets will ultimately be realized. In its reassessment, the Company concluded that the objective and verifiable negative evidence represented by recent actual operating losses outweighed more subjective positive evidence of anticipated future income over the periods in which the deferred tax assets are deductible. As a result, the Company determined that it was necessary to record a full valuation allowance on deferred tax assets of $64,749 thousand as of December 31, 2012. The related expense was recorded in the Company’s statement of operations for the year ended December 31, 2012 as an income tax expense. In addition, management’s review identified income tax adjustments attributable to certain foreign subsidiaries other than Korea and made an adjustment amounting to $112 thousand.

The restatement adjustments for the years ended December 31, 2012 and 2011 impacted our temporary differences between our book income and taxable income, which resulted in an increase of our deferred tax assets for which a full valuation allowance was recorded for the fiscal years then ended and thus there was no tax impact of the other restatement adjustments.

Other—The Company identified liabilities related to non-income-based taxes that the Company may be exposed to in connection with certain tax positions taken during the years ended December 31, 2012 and 2011. We considered the period in which the underlying cause of action occurred, degree of probability of an unfavorable outcome and whether we could make a reasonable estimate.

Account Classification

Revenue—The Company corrected the classification of rental income that was previously recorded as net sales when it should have been recorded in other income (expenses).

Expense—The Company identified errors in classification of expenses that were recorded as research and development when they should have been recorded as cost of sales and vice versa for the years ended December 31, 2012 and 2011. In addition, the Company identified an error in the true-up of expenses that were recorded as selling, general and administrative when it should have been recorded as restructuring and impairment charges as of December 31, 2011. As a result, the Company recorded adjustments to correct the classifications in net expenses.

Cost Center Allocation

The Company identified costs from certain cost centers that were not always allocated consistently with the nature of the Company’s business. As a result, the Company recorded adjustments to reclassify the related costs from cost of sales to selling, general and administrative expenses.

Other Adjustments

In addition to the restatement adjustments described above, the Company has identified other errors that are not material, individually or in the aggregate, but have been recorded in connection with the restatement.

Included in other adjustments are as follows:

•

Accrued Liabilities—The Company identified costs related to certain goods and services that were recorded at the time of receipt of invoice rather than when the goods were delivered or services were rendered. As a result, the Company recorded adjustments to cost of sales and research and development expense.

•

Maintenance Costs—The Company identified certain maintenance expenses that were inappropriately capitalized and depreciated for the year ended December 31, 2012. As a result, the Company corrected these errors by reversing the related amounts in property, plant and equipment, and recorded them in cost of sales and research and development expense for the year then ended.

•

Stock-based Compensation—The Company identified incorrect application of assumptions in computation of stock-based compensation expenses. As a result, the Company recorded adjustments to increase compensation expenses for the years ended December 31, 2012 and 2011.

The nature of the restatement adjustments and the impact of the adjustments to the year ended December 31, 2012 are shown in the following table:


	Year Ended December 31, 2012
				Restatement Adjustments
	As Previously Reported			Revenue Recognition			Inventory Reserves			Understated Employee Benefits			Settlement Obligations		Tax Matters			Account Classification			Cost Center Allocation			Other Adjustments			Total Adjustments			As Restated
Net sales	$	819,592		$	(11,400	)	$	—		$	—		$	1,364	$	—		$	(2,220	)	$	—		$	—		$	(12,256	)	$	807,336
Cost of sales		556,091			(1,301	)		7,810			833			485		—			2,651			(3,231	)		751			7,998			564,089

Gross profit		263,501			(10,099	)		(7,810	)		(833	)		879		—			(4,871	)		3,231			(751	)		(20,254	)		243,247

Selling, general and administrative expenses		78,971			(530	)		—			121			—		773			—			3,286			56			3,706			82,677
Research and development expenses		78,723			—			—			137			—		—			(2,651	)		(55	)		101			(2,468	)		76,255

Operating income		105,807			(9,569	)		(7,810	)		(1,091	)		879		(773	)		(2,220	)		—			(908	)		(21,492	)		84,315

Other income (expenses)
Interest expense, net		(22,600	)		—			—			—			—		—			—			—			—			—			(22,600	)
Foreign currency gain, net		55,961			1,281			—			—			—		(3	)		—			—			41			1,319			57,280
Others		2,119			(449	)		—			—			—		—			2,220			—			—			1,771			3,890

		35,480			832			—			—			—		(3	)		2,220			—			41			3,090			38,570

Income before income taxes		141,287			(8,737	)		(7,810	)		(1,091	)		879		(776	)		—			—			(867	)		(18,402	)		122,885

Income tax expenses (benefits)		(52,014	)		—			—			—			—		64,861			—			—			—			64,861			12,847

Net income	$	193,301		$	(8,737	)	$	(7,810	)	$	(1,091	)	$	879	$	(65,637	)	$	—		$	—		$	(867	)	$	(83,263	)	$	110,038

Earnings per common share—
Basic	$	5.29																												$	3.01
Diluted	$	5.16																												$	2.93

Weighted average number of shares—
Basic		36,567,684																													36,567,684
Diluted		37,496,965																													37,533,391

The nature of the restatement adjustments and the impact of the adjustments to the year ended December 31, 2011 are shown in the following table:


	Year Ended December 31, 2011
				Restatement Adjustments
	As Previously Reported			Revenue Recognition			Inventory Reserves			Understated Employee Benefits			Settlement Obligations			Tax Matters			Account Classification			Other Adjustments			Total Adjustments			As Restated
Net sales	$	772,831		$	(27,539	)	$	—		$	—		$	—		$	—		$	(2,162	)	$	—		$	(29,701	)	$	743,130
Cost of sales		538,515			(10,104	)		10,075			1,740			2,116			—			707			547			5,081			543,596

Gross profit		234,316			(17,435	)		(10,075	)		(1,740	)		(2,116	)		—			(2,869	)		(547	)		(34,782	)		199,534

Selling, general and administrative expenses		68,367			(378	)		—			323			—			1,223			497			191			1,856			70,223
Research and development expenses		76,767			—			—			409			—			—			(707	)		120			(178	)		76,589
Restructuring and impairment charges		4,096			—			—			—			—			—			(497	)		—			(497	)		3,599
Special expense for IPO incentive		12,146			—			—			—			—			—			—			—			—			12,146

Operating income		72,940			(17,057	)		(10,075	)		(2,472	)		(2,116	)		(1,223	)		(2,162	)		(858	)		(35,963	)		36,977

Other expenses
Interest expense, net		(24,984	)		—			—			—			—			—			—			—			—			(24,984	)
Foreign currency loss, net		(11,633	)		121			—			—			—			—			—			164			285			(11,348	)
Loss on early extinguishment of senior notes		(5,459	)		—			—			—			—			—			—			—			—			(5,459	)
Others		(1,052	)		518			—			—			—			—			2,162			—			2,680			1,628

		(43,128	)		639			—			—			—			—			2,162			164			2,965			(40,163	)

Income (loss) before income taxes		29,812			(16,418	)		(10,075	)		(2,472	)		(2,116	)		(1,223	)		—			(694	)		(32,998	)		(3,186	)

Income tax expenses		8,019			—			—			—			—			96			—			—			96			8,115

Net income (loss)	$	21,793		$	(16,418	)	$	(10,075	)	$	(2,472	)	$	(2,116	)	$	(1,319	)	$	—		$	(694	)	$	(33,094	)	$	(11,301	)

Earnings (loss) per common share—
Basic	$	0.56																										$	(0.29	)
Diluted	$	0.55																										$	(0.29	)

Weighted average number of shares—
Basic		38,775,642																											38,775,642
Diluted		39,774,898																											38,775,642

The following table presents the impact of the restatement adjustments on the Company’s previously reported consolidated balance sheet as of December 31, 2012:


	As of December 31, 2012
				Restatement Adjustments
	As Previously Reported			Revenue Recognition			Inventory Reserves			Understated Employee Benefits			Settlement Obligations			Tax Matters			Account Classification			Other Adjustments			Total Adjustments			As Restated

Assets
Current assets
Cash and cash equivalents	$	182,238		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	182,238
Restricted cash		133			—			—			—			—			—			—			—			—			133
Accounts receivable, net		143,331			(37,217	)		—			—			—			—			(131	)		—			(37,348	)		105,983
Inventories, net		89,363			11,787			(18,917	)		—			—			—			—			151			(6,979	)		82,384
Other receivables		1,429			—			—			—			—			—			131			—			131			1,560
Prepaid expenses		7,884			—			—			—			—			—			—			—			—			7,884
Current deferred income tax assets		22,768			—			—			—			—			(20,980	)		—			—			(20,980	)		1,788
Other current assets		9,680			—			—			—			—			—			—			944			944			10,624

Total current assets		456,826			(25,430	)		(18,917	)		—			—			(20,980	)		—			1,095			(64,232	)		392,594

Property, plant and equipment, net		238,256			—			—			—			—			—			—			(864	)		(864	)		237,392
Intangible assets, net		15,260			—			—			—			—			—			—			—			—			15,260
Long-term prepaid expenses		18,048			—			—			—			—			—			—			—			—			18,048
Deferred income tax assets		46,710			—			—			—			—			(44,124	)		—			—			(44,124	)		2,586
Other non-current assets		14,866			—			—			—			—			—			—			—			—			14,866

Total assets	$	789,966		$	(25,430	)	$	(18,917	)	$	—		$	—		$	(65,104	)	$	—		$	231		$	(109,220	)	$	680,746

Current liabilities
Accounts payable	$	79,236		$	—		$	—		$	—		$	—		$	—		$	—		$	129		$	129		$	79,365
Other accounts payable		15,600			—			—			—			—			—			—			1,159			1,159			16,759
Accrued expenses		43,486			—			—			—			1,322			2,111			—			456			3,889			47,375
Derivative liabilities		—			—			—			—			—			—			—			944			944			944
Other current liabilities		9,973			(636	)		—			—			—			207			—			—			(429	)		9,544

Total current liabilities		148,295			(636	)		—			—			1,322			2,318			—			2,688			5,692			153,987

Long-term borrowings, net		201,653			—			—			—			—			—			—			—			—			201,653
Accrued severance benefits, net		112,446			—			—			2,412			—			—			—			—			2,412			114,858
Other non-current liabilities		17,263			—			—			2,615			—			—			—			(1,159	)		1,456			18,719

Total liabilities		479,657			(636	)		—			5,027			1,322			2,318			—			1,529			9,560			489,217

Commitments and contingencies (Note 20)
Stockholders’ equity
Common stock		396			—			—			—			—			—			—			—			—			396
Additional paid-in capital		101,885			—			—			—			—			—			—			524			524			102,409
Retained earnings		287,251			(24,061	)		(18,253	)		(4,740	)		(1,307	)		(66,993	)		—			(1,805	)		(117,159	)		170,092
Treasury stock		(39,918	)		—			—			—			—			—			—			—			—			(39,918	)
Accumulated other comprehensive loss		(39,305	)		(733	)		(664	)		(287	)		(15	)		(429	)		—			(17	)		(2,145	)		(41,450	)

Total stockholders’ equity		310,309			(24,794	)		(18,917	)		(5,027	)		(1,322	)		(67,422	)		—			(1,298	)		(118,780	)		191,529

Total liabilities and stockholders’ equity	$	789,966		$	(25,430	)	$	(18,917	)	$	—		$	—		$	(65,104	)	$	—		$	231		$	(109,220	)	$	680,746

Note—(i) Cost Center Allocation column presented in the restatement table for the consolidated statement of operations for the year ended December 31, 2012 is not included above as the related restatement adjustments do not impact the consolidated balance sheet. (ii) Other Adjustments column includes a balance sheet only reclassification adjustment for $1,159 thousand from other non-current liabilities to other accounts payable; and a gross up adjustment of balance sheet related to derivatives of $944 thousand.

The following table presents the impact of the restatement adjustments on the Company’s previously reported consolidated balance sheet as of December 31, 2011:


	As of December 31, 2011
				Restatement Adjustments
	As Previously Reported			Revenue Recognition			Inventory Reserves			Understated Employee Benefits			Settlement Obligations			Tax Matters			Account Classification			Other Adjustments			Total Adjustments			As Restated

Assets
Current assets
Cash and cash equivalents	$	162,111		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	162,111
Restricted cash		6,830			—			—			—			—			—			—			—			—			6,830
Accounts receivable, net		125,922			(23,055	)		—			—			—			—			(245	)		—			(23,300	)		102,622
Inventories, net		62,836			10,221			(10,049	)		—			—			—			—			(325	)		(153	)		62,683
Other receivables		256			—			—			—			—			—			245			8			253			509
Prepaid expenses		6,032			—			—			—			—			—			—			—			—			6,032
Current deferred income tax assets		3,406			—			—			—			—			(1,330	)		—			—			(1,330	)		2,076
Other current assets		12,503			—			—			—			—			(32	)		—			—			(32	)		12,471

Total current assets		379,896			(12,834	)		(10,049	)		—			—			(1,362	)		—			(317	)		(24,562	)		355,334

Property, plant and equipment, net		182,663			—			—			—			—			—			—			—			—			182,663
Intangible assets, net		16,787			—			—			—			—			—			—			—			—			16,787
Long-term prepaid expenses		4,790			—			—			—			—			—			—			—			—			4,790
Deferred income tax assets		3,537			—			—			—			—			1,233			—			—			1,233			4,770
Other non-current assets		15,002			—			—			—			—			—			—			—			—			15,002

Total assets	$	602,675		$	(12,834	)	$	(10,049	)	$	—		$	—		$	(129	)	$	—		$	(317	)		(23,329	)	$	579,346

Current liabilities
Accounts payable	$	77,848		$	—		$	—		$	—		$	—		$	—		$	—		$	32		$	32		$	77,880
Other accounts payable		13,452			—			—			—			—			—			—			—			—			13,452
Accrued expenses		31,723			—			—			—			2,100			1,216			—			430			3,746			35,469
Current portion of capital lease obligation		2,852			—			—			—			—			—			—			—			—			2,852
Derivative liabilities		9,757			—			—			—			—			—			—			—			—			9,757
Other current liabilities		2,007			1,918			—			—			—			(32	)		—			—			1,886			3,893

Total current liabilities		137,639			1,918			—			—			2,100			1,184			—			462			5,664			143,303

Long-term borrowings, net		201,389			—			—			—			—			—			—			—			—			201,389
Accrued severance benefits, net		90,755			—			—			1,677			—			—			—			—			1,677			92,432
Other non-current liabilities		6,222			—			—			1,828			—			—			—			—			1,828			8,050

Total liabilities		436,005			1,918			—			3,505			2,100			1,184			—			462			9,169			445,174

Commitments and contingencies (Note 20)
Stockholders’ equity
Common stock		394			—			—			—			—			—			—			—			—			394
Additional paid-in capital		98,929			—			—			—			—			—			—			131			131			99,060
Retained earnings		93,950			(15,583	)		(10,133	)		(3,830	)		(2,116	)		(1,319	)		—			(915	)		(33,896	)		60,054
Treasury stock		(11,793	)		—			—			—			—			—			—			—			—			(11,793	)
Accumulated other comprehensive loss		(14,810	)		831			84			325			16			6			—			5			1,267			(13,543	)

Total stockholders’ equity		166,670			(14,752	)		(10,049	)		(3,505	)		(2,100	)		(1,313	)		—			(779	)		(32,498	)		134,172

Total liabilities and stockholders’ equity	$	602,675		$	(12,834	)	$	(10,049	)	$	—		$	—		$	(129	)	$	—		$	(317	)	$	(23,329	)	$	579,346

Statement of Cash Flows

The following table presents the impact of the restatement adjustments on the Company’s previously reported consolidated statements of cash flows for the years ended December 31, 2012 and 2011:


	Year Ended December 31, 2012									Year Ended December 31, 2011
	As Previously Reported			Restatement Adjustments			As Restated			Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities
Net income (loss)	$	193,301		$	(83,263	)	$	110,038		$	21,793		$	(33,094	)	$	(11,301	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization		32,390			(324	)		32,066			51,224			—			51,224
Provision for severance benefits		20,937			593			21,530			14,698			1,783			16,481
Amortization of debt issuance costs and original issue discount		1,009			—			1,009			970			—			970
Loss (gain) on foreign currency translation, net		(63,567	)		(1,319	)		(64,886	)		15,140			(305	)		14,835
Restructuring and impairment charges		—			—			—			2,499			—			2,499
Stock-based compensation		1,996			393			2,389			2,085			131			2,216
Loss on early extinguishment of senior notes		—			—			—			5,459			—			5,459
Other		(615	)		(48	)		(663	)		1,585			(135	)		1,450
Changes in operating assets and liabilities
Accounts receivable		(7,534	)		13,292			5,758			(6,234	)		25,431			19,197
Inventories, net		(19,066	)		6,571			(12,495	)		4,274			85			4,359
Other receivables		(458	)		121			(337	)		2,657			(254	)		2,403
Other current assets		10,944			(109	)		10,835			(5,081	)		(12	)		(5,093	)
Deferred tax assets		(62,743	)		64,657			1,914			1,412			97			1,509
Accounts payable		(1,838	)		101			(1,737	)		18,084			60			18,144
Other accounts payable		(9,185	)		(1,822	)		(11,007	)		(6,891	)		(1,061	)		(7,952	)
Accrued expenses		24,412			(108	)		24,304			(5,577	)		3,909			(1,668	)
Other current liabilities		11,857			(2,360	)		9,497			(3,050	)		1,899			(1,151	)
Other non-current liabilities		(3,956	)		627			(3,329	)		326			511			837
Payment of severance benefits		(6,997	)		—			(6,997	)		(10,478	)		—			(10,478	)
Other		216			1			217			(364	)		1			(363	)

Net cash provided by operating activities		121,103			(2,997	)		118,106			104,531			(954	)		103,577

Cash flows from investing activities
Decrease in restricted cash		13,021			—			13,021			6,410			—			6,410
Increase in restricted cash		(6,238	)		—			(6,238	)		(13,609	)		—			(13,609	)
Proceeds from disposal of plant, property and equipment		937			—			937			219			—			219
Purchase of property, plant and equipment		(61,522	)		2,984			(58,538	)		(48,173	)		1,060			(47,113	)
Payment for intellectual property registration		(882	)		—			(882	)		(696	)		—			(696	)
Payment for purchase of Dawin, net of cash acquired		(8,642	)		—			(8,642	)		—			—			—
Collection of guarantee deposits		81			—			81			1,544			—			1,544
Payment of guarantee deposits		(320	)		—			(320	)		(2,482	)		—			(2,482	)
Other		37			—			37			(371	)		—			(371	)

Net cash used in investing activities		(63,528	)		2,984			(60,544	)		(57,158	)		1,060			(56,098	)

Cash flows from financing activities
Proceeds from issuance of common stock		962			—			962			9,336			—			9,336
Repurchase of senior notes		—			—			—			(50,307	)		—			(50,307	)
Repayment of obligations under capital lease		(2,968	)		—			(2,968	)		(6,312	)		—			(6,312	)
Acquisition of treasury stock		(28,125	)		—			(28,125	)		(11,793	)		—			(11,793	)

Net cash used in financing activities		(30,131	)		—			(30,131	)		(59,076	)		—			(59,076	)
Effect of exchange rates on cash and cash equivalents		(7,317	)		13			(7,304	)		1,642			(106	)		1,536

Net increase (decrease) in cash and cash equivalents		20,127			—			20,127			(10,061	)		—			(10,061	)

Cash and cash equivalents
Beginning of the period		162,111			—			162,111			172,172			—			172,172

End of the period	$	182,238			—		$	182,238		$	162,111			—		$	162,111

Supplemental cash flow information
Cash paid for interest	$	21,955			—		$	21,955		$	24,722			—		$	24,722

Cash paid (refunded) for income taxes	$	(609	)		—		$	(609	)	$	1,954			—		$	1,954

Non-cash investing and financing activities
Property, plant and equipment additions in other accounts payable	$	—		$	2,989		$	2,989		$	—		$	1,052		$	1,052
Deferred offering costs reclassified as reduction of additional paid-in capital	$	—		$	—		$	—		$	7,194		$	46		$	7,240

Comprehensive Income

The following table presents the impact of the restatement adjustments on the Company’s previously reported consolidated statements of comprehensive income for the years ended December 31, 2012 and 2011:


	Year Ended December 31, 2012						Year Ended December 31, 2011
	As Previously Reported			As Restated			As Previously Reported			As Restated

Net income (loss)	$	193,301		$	110,038		$	21,793		$	(11,301	)
Other comprehensive income (loss)
Foreign currency translation adjustments		(34,325	)		(37,737	)		7,105			8,373
Derivative adjustments
Fair valuation of derivatives		4,788			5,237			(5,041	)		(5,559	)
Reclassification adjustment for loss (gain) loss on derivatives included in net income (loss)		5,057			4,608			(11,496	)		(10,979	)
Unrealized loss on investments		(15	)		(15	)		(103	)		(103	)

Total comprehensive income (loss)	$	168,806		$	82,131		$	12,258		$	(19,569	)

Cumulative Restatement Adjustments to Previously Reported Beginning retained earnings

The following table presents the impact of the restatement adjustments on the Company’s previously reported consolidated retained earnings at January 1, 2011:


Retained earnings at January 1, 2011—As Previously Reported	$	72,157

Adjustments:
Understated Employee Benefits		(1,358	)
Other Revenue Recognition—Non-recurring Engineering		835
Accrued Liabilities		(221	)
Inventory Reserves		(58	)

Total adjustments		(802	)

Retained earnings at January 1, 2011—As Restated	$	71,355