MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED NET INCOME

(In thousands of US dollars, except share data)

(Unaudited)

Three Months Ended

June 30,

2017

March 31,

2017

June 30,

2016

Net income (loss)

$

(8,059)

$

43,738

$

(17,816)

Adjustments:

Interest expense, net

5,187

4,976

4,001

Income tax expenses

538

853

272

Depreciation and amortization

6,773

6,758

6,228

EBITDA

4,439

56,325

(7,315)

Restructuring and other charges (gain)

—

(17,010)

1,305

Early termination charges

2,262

11,107

4,240

Equity-based compensation expense

349

830

968

Foreign currency loss (gain), net

11,905

(41,786)

7,101

Derivative valuation loss (gain), net

467

(637)

8

Restatement related expenses

900

4,259

2,306

Adjusted EBITDA

$

20,322

$

13,088

$

8,613

Net income (loss)

$

(8,059)

$

43,738

$

(17,816)

Adjustments:

Restructuring and other charges (gain)

—

(17,010)

1,305

Early termination charges

2,262

11,107

4,240

Equity-based compensation expense

349

830

968

Foreign currency loss (gain), net

11,905

(41,786)

7,101

Derivative valuation loss (gain), net

467

(637)

8

Restatement related expenses

900

4,259

2,306

Adjusted Net Income (Loss)

$

7,824

$

501

$

(1,888)

Adjusted Net Income (Loss) per common share:

- Basic

$

0.23

$

0.01

$

(0.05)

- Diluted

$

0.21

$

0.01

$

(0.05)

Weighted average number of shares – Basic

33,952,574

33,662,297

34,716,081

Weighted average number of shares – Diluted

44,974,577

34,301,291

34,716,081