*We define return on invested capital ("ROIC") as net operating profit after tax (the sum of operating income plus equity in earnings of unconsolidated affiliate less income tax expense) divided by average invested capital (the sum of average debt plus average equity less average cash). ROIC is not defined by U.S. generally accepted accounting principles ("U.S. GAAP"). However, we believe ROIC is relevant and useful information for our investors and management in evaluating whether our capital investments are generating stockholder value. We define free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. Free cash flow is not defined by U.S. GAAP. However, we believe free cash flow to be relevant and useful information to our investors because it provides them with additional information in assessing our liquidity, capital resources and financial operating results. Our management uses free cash flow in evaluating our liquidity, our ability to service debt and our ability to fund capital additions. However, free cash flow has certain limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other, non-discretionary expenditures, such as mandatory debt service, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. This measure should be considered in addition to, and not as a substitute for, or superior to, other measures of liquidity or financial performance prepared in accordance with U.S. GAAP, such as net cash provided by operating activities. Furthermore, our definition of free cash flow may not be comparable to similarly titled measures reported by other companies.

**Amkor's Board of Directors previously authorized $300 million for the repurchase of our common stock. During 2012, we repurchased 16.5 million shares for a purchase price of $79.5 million. Since inception of the program, we have repurchased a total of 45.0 million shares at an aggregate purchase price of $208.4 million.

In the press release above we provide adjusted gross margin, adjusted net income and adjusted earnings per diluted share for the year ended December 31, 2012. We present these non-GAAP amounts to demonstrate the impact of the loss contingency we recognized for the year ended December 31, 2012 related to our pending patent license arbitration with Tessera, Inc. However, these measures have limitations, including that they exclude the charges for the Tessera arbitration award, which is an amount that the company may ultimately have to pay in cash. Furthermore, the factors affecting the calculation of the arbitration award are complex and subject to determination by the arbitration panel. Therefore, the final amount of the loss may be more than the amount we have recognized. Accordingly, these measures that exclude the loss contingency should be considered in addition to, and not as a substitute for, or superior to, gross margin, net income and earnings per diluted share prepared in accordance with U.S. GAAP. Below is the reconciliation of adjusted gross margin, adjusted net income and adjusted earnings per diluted share to U.S. GAAP gross margin, net income and earnings per diluted share.

Non-GAAP Financial Measures Reconciliation:
					2012
Gross margin					16			%
Plus: Loss contingency divided by net sales					1			%
Adjusted gross margin					17			%
					2012
					(In millions)
Net income					$	62
Plus: Loss contingency, net of tax					33
Adjusted net income					$	95
					2012
Earnings per diluted share					$	0.32
Plus: Loss contingency per diluted share					0.14
Adjusted earnings per diluted share					$	0.46

AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
			For the Three Months Ended December 31,								For the Year Ended December 31,
			2012				2011				2012				2011
			(In thousands, except per share data)
Net sales			$	722,956			$	683,769			$	2,759,846			$	2,776,359
Cost of sales			589,634				571,942				2,315,436				2,285,790
Gross profit			133,322				111,827				444,410				490,569
Operating expenses:
Selling, general and administrative			56,959				55,660				217,000				246,513
Research and development			13,354				12,465				54,118				50,386
Total operating expenses			70,313				68,125				271,118				296,899
Operating income			63,009				43,702				173,292				193,670
Other expense (income):
Interest expense			21,647				18,220				82,374				74,212
Interest expense, related party			3,492				3,492				13,969				12,394
Interest income			(671		)		(961		)		(3,160		)		(2,749		)
Foreign currency (gain) loss			(276		)		520				4,185				2,178
Loss on debt retirement, net			1,199				—				1,199				15,531
Equity in earnings of unconsolidated affiliate			(171		)		(444		)		(5,592		)		(7,085		)
Other income, net			(75		)		(335		)		(1,586		)		(1,030		)
Total other expense, net			25,145				20,492				91,389				93,451
Income before income taxes			37,864				23,210				81,903				100,219
Income tax expense (benefit)			9,992				(2,351		)		19,001				7,124
Net income			27,872				25,561				62,902				93,095
Net income attributable to noncontrolling interests			(526		)		(711		)		(884		)		(1,287		)
Net income attributable to Amkor			$	27,346			$	24,850			$	62,018			$	91,808
Net income attributable to Amkor per common share:
Basic			$	0.18			$	0.14			$	0.39			$	0.48
Diluted			$	0.13			$	0.11			$	0.32			$	0.39
Shares used in computing per common share amounts:
Basic			152,382				176,941				160,105				190,829
Diluted			235,148				259,633				243,004				273,686

AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
			December 31,
			2012				2011
			(In thousands, except per share data)
ASSETS
Current assets:
Cash and cash equivalents			$	413,048			$	434,631
Restricted cash			2,680				2,680
Accounts receivable:
Trade, net of allowances			389,999				298,543
Other			13,098				27,197
Inventories			227,439				198,427
Other current assets			43,444				35,352
Total current assets			1,089,708				996,830
Property, plant and equipment, net			1,819,969				1,656,214
Intangibles, net			4,766				8,382
Investments			38,690				36,707
Restricted cash			2,308				4,001
Other assets			68,074				70,913
Total assets			$	3,023,515			$	2,773,047
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt			$	—			$	59,395
Trade accounts payable			439,663				424,504
Accrued expenses			191,064				158,287
Total current liabilities			630,727				642,186
Long-term debt			1,320,000				1,062,256
Long-term debt, related party			225,000				225,000
Pension and severance obligations			139,379				129,096
Other non-current liabilities			21,415				13,288
Total liabilities			2,336,521				2,071,826
Equity:
Amkor stockholders' equity:
Preferred stock			—				—
Common stock			198				197
Additional paid-in capital			1,614,143				1,611,242
Accumulated deficit			(736,444		)		(798,462		)
Accumulated other comprehensive income			11,241				10,849
Treasury stock			(210,983		)		(130,560		)
Total Amkor stockholders' equity			678,155				693,266
Noncontrolling interests in subsidiaries			8,839				7,955
Total equity			686,994				701,221
Total liabilities and equity			$	3,023,515			$	2,773,047

AMKOR TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
			For the Year Ended December 31,
			2012				2011
			(In thousands)
Cash flows from operating activities:
Net income			$	62,902			$	93,095
Depreciation and amortization			370,479				335,644
Loss on debt retirement, net			737				10,557
Other operating activities and non-cash items			5,242				1,176
Changes in assets and liabilities			(56,397		)		76,360
Net cash provided by operating activities			382,963				516,832
Cash flows from investing activities:
Purchases of property, plant and equipment			(533,512		)		(466,694		)
Proceeds from the sale of property, plant and equipment			2,727				15,823
Financing lease payment from unconsolidated affiliate			15,484				10,794
Other investing activities			1,280				9,543
Net cash used in investing activities			(514,021		)		(430,534		)
Cash flows from financing activities:
Borrowings under short-term debt			30,000				26,567
Payments under short-term debt			(50,000		)		(21,567		)
Proceeds from issuance of long-term debt			637,528				387,512
Proceeds from issuance of long-term debt, related party			—				75,000
Payments of long-term debt, net of redemption premiums and discounts			(420,116		)		(392,191		)
Payments for debt issuance costs			(6,007		)		(5,875		)
Payments for repurchase of common stock			(80,946		)		(128,368		)
Proceeds from the issuance of stock through share-based compensation plans			182				821
Payments of tax withholding for restricted shares			(609		)		(776		)
Net cash provided by (used in) financing activities			110,032				(58,877		)
Effect of exchange rate fluctuations on cash and cash equivalents			(557		)		2,212
Net (decrease) increase in cash and cash equivalents			(21,583		)		29,633
Cash and cash equivalents, beginning of period			434,631				404,998
Cash and cash equivalents, end of period			$	413,048			$	434,631

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