MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of US dollars, except share data)

(Unaudited)

September 30,

2011

December 31,
2010

Assets

Current assets

       Cash and cash equivalents

$

159,468

$

172,172

       Restricted cash

9,210

—

       Accounts receivable, net

124,150

119,054

       Inventories, net

69,817

68,435

       Other receivables

1,950

2,919

       Prepaid expenses

8,770

8,207

       Other current assets

8,159

18,920

                Total current assets

381,524

389,707

Property, plant and equipment, net

180,032

179,012

Intangible assets, net

18,565

27,538

Long-term prepaid expenses

4,759

8,235

Other non-current assets

20,986

21,252

                Total assets

$

605,866

$

625,744

Liabilities and Stockholder s' Equity

Current liabilities

        Accounts payable

$

75,947

$

58,264

        Other accounts payable

12,425

14,645

        Accrued expenses

37,012

32,635

        Current portion of capital lease obligations

4,415

5,557

        Other current liabilities

13,762

5,048

                Total current liabilities

143,561

116,149

Long-term borrowings , net

201,325

246,882

Long-term o bligation s under capital lease

—

3,105

Accrued severance benefits, net

91,106

87,778

Other non-current liabilities

9,927

8,979

                Total liabilities

445,919

462,893

Commitments and contingencies

Stockholder s ' equity

        C ommon stock , $0.01 par value , 150 ,000,000 shares authorized, 39,354,006

          and 38,401,985 shares issued and outstanding at September 30 , 201 1 and

          December 31, 20 10 , respectively

394

384

Additional paid-in capital

98,310

95,585

Retained earnings

70,245

72,157

Accumulated other comprehensive loss

(9,002)

(5,275)

                Total stockholders ' equity

159,947

162,851

                Total liabilities and stockholders ' equity

$

605,866

$

625,744

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(I n thousands of US dollars)

(Unaudited)

Three Months Ended

Nine M onth s

E nded

September 30 ,

20 1 1

September 30 ,

20 1 1

September 30 ,

20 10

Cash flows from operating activities

Net income (loss)

$

(56,010)

$

(1,912)

$

61,849

Adjustments to reconcile net income to net cash provided by operating activities

        Depreciation and amortization

13,053

42,368

44,332

        Provision for severance benefits

4,741

13,137

15,123

        Amortization of debt issuance costs and original issue discount

237

728

687

        Loss (gain) on foreign currency translation, net

77,329

33,220

(16,704)

        Gain on disposal of property, plant and equipment, net

(4)

(15)

(7)

        Loss on disposal of intangible assets, net

9

17

9

        Restructuring and impairment charges

1,621

4,096

1,045

        Stock -based compensation

552

1,798

4,072

        Cash used for reorganization items

—

—

1,573

        Loss on early extinguishment of senior notes

1,357

5,460

—

        Other

(453)

651

951

Changes in operating assets and liabilities

        Accounts receivable

(6,503)

(4,400)

(61,771)

        Inventories

9,900

(4,400)

193

        Other receivables

2,145

836

(1,229)

        Other current assets

(2,312)

(3,196)

(221)

        Deferred tax assets

659

1,483

1,133

        Accounts payable

2,933

15,072

10,400

        Other accounts payable

(6,643)

7,157

6,332

        Accrued expenses

(21,419)

(18,278)

22,094

        Other current liabilities

(54)

(1,209)

516

        Payment of severance benefits

(2,804)

(6,549)

(4,707)

        Other non-current liabilities

373

141

(2,470)

Net cash provided by operating activities before reorganization items

18,707

86,205

83,200

        Cash used for reorganization items

—

—

(1,573)

Net cash provided by operating activities

18,707

86,205

81,627

Cash flows from investing activities

        Increase in restricted cash

(9,711)

(9,711)

—

        Proceeds from disposal of plant, property and equipment

6

29

10

        Purchase of plant, property and equipment

(16,019)

(42,945)

(29,739)

        Payment for intellectual property registration

(197)

(521)

(437)

        Decrease in short-term financial instruments

—

—

329)

        Collection of g uarantee deposits

5

984

1,011

        Payment of guarantee deposits

(1,006)

(2,489)

(794)

        Other

(223)

(625)

(13)

Net cash used in investing activities

(27,145)

(55,278)

(29,633)

Cash flows from financing activities

        Proceeds from i ssuance of common stock

17

8,835

—

        Proceeds from issuance of senior notes

—

—

246,685

        Debt issuance costs paid

—

—

(8,313)

        Distribution to stockholders

—

—

(130,697)

        Repayment of long-term borrowings

—

—

(61,750)

        Repurchase of senior notes

(12,157)

(50,307)

—

        Repayment of obligation s under capital lease

(1,649)

(4,831)

(1,812)

Net cash provided by (used in) financing activities

(13,789)

(46,303)

44,113

Effect of exchange rates on cash and cash equivalents

3,931

2,672

397

Net increase (de crease ) in cash and cash equivalents

(18,296)

(12,704)

96,504

Cash and cash equivalents

Beginning of the period

177,764

172,172

64,925

End of the period

$

159,468

$

159,468

$

161,429