MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of US dollars)

(Unaudited)

Three Months

Ended

Six Months

Ended

June 30,

2015

June 30,

2015

June 30,

2014

Cash flows from operating activities

Net loss

$

(30,626)

$

(50,655)

$

(6,595)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Depreciation and amortization

6,797

13,667

15,022

Provision for severance benefits

4,617

11,877

9,426

Bad debt expenses (reversal of allowance)

17

(3)

3,724

Amortization of debt issuance costs and original issue discount

162

324

301

Loss (gain) on foreign currency, net

12,967

17,146

(31,969)

Gain on disposal of investments

—

—

(1,524)

Stock-based compensation

1,792

1,977

1,072

Other

1,769

1,547

758

Changes in operating assets and liabilities

Accounts receivable

3,012

3,145

6,712

Inventories, net

3,324

1,623

(11,537)

Other receivables

(617)

5,523

781

Other current assets

3,888

2,235

4,590

Deferred tax assets

15

339

391

Accounts payable

(18,333)

(12,431)

4,556

Other accounts payable

(669)

(5,550)

(8,560)

Accrued expenses

(3,084)

(10,710)

20,260

Other current liabilities

(284)

(2,058)

1,230

Other non-current liabilities

(864)

(1,084)

292

Payment of severance benefits

(2,890)

(4,231)

(3,490)

Other

220

(147)

13

Net cash provided by (used in) operating activities

(18,787)

(27,466)

5,453

Cash flows from investing activities

Payment of hedge collateral

(6,555)

(6,555)

—

Proceeds from disposal of investments

—

—

2,003

Purchase of plant, property and equipment

(1,407)

(1,964)

(12,058)

Payment for intellectual property registration

(186)

(263)

(490)

Payment of guarantee deposits

(231)

(642)

(308)

Other

222

237

39

Net cash used in investing activities

(8,157)

(9,187)

(10,814)

Cash flows from financing activities

Proceeds from issuance of common stock

1,208

1,208

67

Net cash provided by financing activities

1,208

1,208

67

Effect of exchange rates on cash and cash equivalents

7,013

5,683

(7,315)

Net decrease in cash and cash equivalents

(18,723)

(29,762)

(12,609)

Cash and cash equivalents

Beginning of the period

91,395

102,434

153,606

End of the period

$

72,672

$

72,672

$

140,997