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Luxembourg (State or other jurisdiction of incorporation or organization) | 3674 (Primary Standard Industrial Classification Code Number) | Not Applicable (I.R.S. Employer Identification No.) |
Delaware | 3674 | 84-1664144 | ||
(State or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer | ||
incorporation or organization) | Classification Code Number) | Identification No.) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
Proposed | Proposed Maximum | Amount of | ||||||||||
Title of Each Class of | Amount to be | Maximum Offering | Aggregate | Registration | ||||||||
Securities to be Registered | Registered | Price per Unit(1) | Offering Price(1) | Fee | ||||||||
10.500% Senior Notes due 2018 | $250,000,000 | 100% | $250,000,000 | $17,825 | ||||||||
Guarantees of 10.500% Senior Notes due 2018(2) | N/A | N/A | N/A | N/A | ||||||||
(1) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933, as amended (the “Securities Act”). |
(2) | Represents the guarantees of the 10.500% Senior Notes due 2018, to be issued by the additional registrants. Pursuant to Rule 457(n) under the Securities Act, no additional registration fee is being paid in respect of the guarantees. |
State or Other Jurisdiction of | ||||||
Incorporation or | I.R.S. Employer Identification | |||||
Exact Name of Additional Registrants | Organization | Number | ||||
MagnaChip Semiconductor LLC | Delaware | 83-0406195 | ||||
MagnaChip Semiconductor B.V. | The Netherlands | Not Applicable | ||||
MagnaChip Semiconductor, Inc. | California | 77-0478632 | ||||
MagnaChip Semiconductor SA Holdings LLC | Delaware | Not Applicable | ||||
MagnaChip Semiconductor Limited | United Kingdom | 98-0439386 | ||||
MagnaChip Semiconductor Limited | Taiwan | 98-0439388 | ||||
MagnaChip Semiconductor Limited | Hong Kong | 98-0439389 | ||||
MagnaChip Semiconductor Inc. | Japan | Not Applicable | ||||
MagnaChip Semiconductor Holding Company Limited | British Virgin Islands | Not Applicable | ||||
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
• | We will exchange all old notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer. | |
• | You may withdraw tendered old notes at any time prior to the expiration of the exchange offer. | |
• | You are required to make the representations described on pages 9 and 213 to us. | |
• | The terms of the new notes will be substantially identical to the terms of the old notes (including principal amount, interest rate, maturity and redemption rights), except that the new notes are registered under the Securities Act and will bear a separate CUSIP number, and the transfer restrictions, registration rights and related special interest terms applicable to the old notes will not apply to the new notes. | |
• | We will not receive any proceeds from the exchange offer. | |
• | There is no existing market for the new notes to be issued, and we do not intend to apply for their listing or quotation on any securities exchange or market. |
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EXHIBIT 23.1 | ||||||||
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EX-99.4 |
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• | “MagnaChip,” “we,” “us,” “our” and “Our Company” refer collectively to MagnaChip Semiconductor LLC, the parent company of our consolidated group, MagnaChip Semiconductor S.A. and MagnaChip Semiconductor Finance Company, the co-issuers of the old notes and the new notes being offered hereby, and their respective subsidiaries on a consolidated basis, and such terms refer collectively to MagnaChip Semiconductor LLC, the parent company of our consolidated group, MagnaChip Semiconductor S.A. and MagnaChip Semiconductor Finance Company, and their respective subsidiaries on a consolidated basis. | |
• | “MagnaChip Corporation” refers to MagnaChip Semiconductor Corporation (the expected corporate successor to MagnaChip Semiconductor LLC pursuant to the corporate conversion described below that will occur if and when MagnaChip Semiconductor LLC consummates an initial public offering of its equity securities). | |
• | “MagnaChip Korea” refers to MagnaChip Semiconductor, Ltd., our principal operating subsidiary. | |
• | “Korea” refers to the Republic of Korea or South Korea. |
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• | Broad and advanced analog and mixed-signal semiconductor technology and intellectual property platform that allows us to develop new products and meet market demands quickly; | |
• | Established relationships and close collaboration with leading global consumer electronics companies, which enhance our visibility into new product opportunities, markets and technology trends; |
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• | Longstanding presence of our management, personnel and manufacturing base in Asia and proximity to our largest customers and to the core of the global consumer electronics supply chain, which allows us to respond rapidly and efficiently to our customers’ needs; | |
• | Flexible, service-oriented culture and approach to customers; | |
• | Distinctive analog and mixed-signal process technology and manufacturing expertise; and | |
• | Manufacturing facilities with specialty processes and a low-cost operating structure, which allow us to maintain price competitiveness across our product and service offerings. |
• | Leverage our advanced analog and mixed-signal technology platform to continuously innovate and deliver products with high levels of performance and integration, as well as to expand our technology offerings within our target markets, such as our power management products; | |
• | Increase business with our global customer base of leading consumer electronics original equipment manufacturers, or OEMs, and fabless companies by collaborating on critical design, product and manufacturing process development and leveraging our deep knowledge of customer needs; | |
• | Broaden our customer base by expanding our global design centers and local application engineering support and sales presence, particularly in China and other high-growth regions; | |
• | Aggressively grow our power management product portfolio business by introducing new products, expanding distribution and cross-selling products to our existing customers; | |
• | Drive execution excellence in new product development, manufacturing efficiency and quality, customer service and personnel development; and | |
• | Optimize asset utilization and return on capital investments by maintaining our focus on specialty process technologies that do not require substantial investment in leading edge process equipment and by utilizing our manufacturing facilities for both our display driver and power management businesses and manufacturing services customers. |
• | Closing our Imaging Solutions business, which had been a source of substantial ongoing operating losses amounting to $91.5 million and $51.7 million in 2008 and 2007, respectively, and which required substantial ongoing capital investment; | |
• | Through our reorganization proceedings, reducing our indebtedness from $845 million immediately prior to the effectiveness of our plan of reorganization to $61.8 million as of December 31, 2009 and retiring $149 million of redeemable convertible preferred units; | |
• | Streamlining our cost structure to reduce ongoing fixed and variable expenses; | |
• | Entering into a hedging program to mitigate the impact of currency fluctuation on our financial results; and |
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• | Focusing on major customers, key product lines, growth segments and areas of competitive differentiation. |
• | We have a history of losses and may not be profitable in the future; | |
• | On June 12, 2009, we filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code and our plan of reorganization became effective on November 9, 2009; | |
• | In connection with our audit for the ten-month period ended October 25, 2009 and the two-month period ended December 31, 2009, our auditors identified two control deficiencies which represent a material weakness in our internal control over financial reporting; if we fail to effectively remediate this weakness, the accuracy and timing of our financial reporting may be adversely affected; | |
• | The cyclical nature of the semiconductor industry may limit our ability to maintain or increase net sales and profit levels during industry downturns; | |
• | If we fail to develop new products and process technologies or enhance our existing products and services in order to react to rapid technological change and market demands, our business will suffer; | |
• | A significant portion of our sales comes from a relatively limited number of customers and the loss of any of such customers or a significant decrease in sales to any of such customers would harm our revenue and gross profit; and | |
• | The average selling prices of our semiconductor products have at times declined rapidly and will likely do so in the future, which could harm our revenue and gross profit. |
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(1) | Assuming completion of the corporate conversion, MagnaChip Corporation will succeed to the business of MagnaChip Semiconductor LLC. | |
(2) | Does not guarantee the notes offered hereby. |
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The Exchange Offer | We are offering to exchange up to $250,000,000 aggregate principal amount of 10.500% Senior Notes due 2018, which have been registered under the Securities Act and which we refer to as the “new notes,” for our outstanding, unregistered 10.500% Senior Notes due 2018, which we issued on April 9, 2010 and which we refer to as the “old notes,” in denominations of $2,000 and integral multiples of $1,000 in excess thereof. Unless we specify otherwise or the context indicates otherwise, we refer to the new notes and the old notes together as the “notes.” | |
The terms of the new notes will be substantially identical to the terms of the old notes (including principal amount, interest rate, maturity and redemption rights), except that the new notes are registered under the Securities Act and will bear a separate CUSIP number, and the transfer restrictions, registration rights and related special interest terms applicable to the old notes will not apply to the new notes. The old notes may be exchanged only in denominations of $2,000 and integral multiples of $1,000. We intend by the issuance of the new notes to satisfy our obligations under the notes registration rights agreement. | ||
Expiration of the Exchange Offer; Acceptance and Issuance of New Notes | The exchange offer will expire at 5:00 p.m., New York City time, on , 2010, or such later date and time to which we may extend it in our sole discretion. Subject to the conditions stated in “Exchange offer — Terms of the Exchange Offer — Conditions to the Exchange Offer,” we will accept for exchange any and all outstanding old notes that are validly tendered and not validly withdrawn before the expiration of the exchange offer. The new notes will be delivered promptly after the expiration of the exchange offer. Any old notes not accepted for exchange for any reason will be returned without expense to you promptly after the expiration or termination of the exchange offer. | |
Withdrawal Rights | You may withdraw your tender of old notes in the exchange offer at any time before the expiration of the exchange offer. | |
Conditions to the Exchange Offer | The exchange offer is not conditioned upon any minimum aggregate principal amount of old notes being tendered for exchange. The exchange offer is subject to customary conditions, which we may waive. Please read “Exchange offer — Terms of the Exchange Offer — Conditions to the Exchange Offer” for more information regarding the conditions to the exchange offer. |
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Procedures for Tendering Notes | To tender old notes held in book-entry form through the Depository Trust Company, or DTC, you must transfer your old notes into the exchange agent’s account in accordance with DTC’s Automated Tender Offer Program, or ATOP, system. In lieu of delivering a letter of transmittal to the exchange agent, a computer-generated message, in which the holder of the old notes acknowledges and agrees to be bound by the terms of the letter of transmittal (an “agent’s message”), must be transmitted by DTC on behalf of a holder of old notes and received by the exchange agent before 5:00 p.m., New York City time, on the expiration date. In all other cases, a letter of transmittal must be manually executed and received by the exchange agent before 5:00 p.m., New York City time, on the expiration date. By signing, or agreeing to be bound by, the letter of transmittal, you will represent to us that, among other things: | |
• you are not our affiliate as defined in Rule 405 of the Securities Act, or if you are such an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; | ||
• you are not engaged in and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the new notes; | ||
• you are acquiring the new notes in your ordinary course of business; | ||
• if you are a broker-dealer that holds old notes that were acquired for your own account as a result of market-making activities or other trading activities (other than old notes acquired directly from us or our affiliates), you will deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the new notes; | ||
• if you are a broker-dealer, you did not purchase the old notes to be exchanged in the exchange offer from us or our affiliates; | ||
• you are not acting on behalf of any person who could not truthfully and completely make the representations contained in the foregoing clauses. | ||
Special Procedures for Beneficial Owners | If you are a beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you want to tender old notes in the exchange offer, you should contact the registered holder promptly and instruct the registered holder to tender on your behalf. If you wish to tender on your own behalf, you must, before completing and executing the letter of transmittal and delivering your old notes, either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the registered holder. |
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Guaranteed Delivery Procedures | If you wish to tender your old notes, and time will not permit your required documents to reach the exchange agent by the expiration date, or the procedure for book-entry transfer cannot be completed on time, you may tender your old notes under the procedures described in “Exchange offer — Guaranteed Delivery Procedures.” | |
Failure to Exchange Your Old Notes | All untendered old notes will remain subject to the restrictions on transfer provided for in the old notes and in the indenture. Generally, the old notes that are not exchanged for new notes in the exchange offer will remain restricted securities, and may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Following the exchange offer, we will have no obligation to register outstanding old notes under the Securities Act or to pay contingent increases in interest based on our original registration obligation, except in the limited circumstances provided under the notes registration rights agreement. | |
Resales | Based on interpretations by the staff of the Securities and Exchange Commission, or SEC, in no action letters issued to third parties, we believe that new notes issued in exchange for old notes in the exchange offer may be offered for resale, resold or otherwise transferred by you after the exchange offer without further compliance with the registration and prospectus delivery requirements of the Securities Act (subject to certain representations required to be made by each holder of old notes, as set forth under “Exchange Offer — Procedures for Tendering”), unless you are a broker-dealer receiving securities for your own account, so long as: | |
• you are not one of our “affiliates,” which is defined in Rule 405 of the Securities Act; | ||
• you acquire the new notes in the ordinary course of your business; | ||
• you do not have any arrangement or understanding with any person to participate in the distribution of the new notes; and | ||
• you are not engaged in, and do not intend to engage in, a distribution of the new notes. | ||
• If you are our affiliate, or you are engaged in, intend to engage in or have any arrangement or understanding with respect to, the distribution of new notes acquired in the exchange offer, you (1) should not rely on our interpretations of the position of the SEC’s staff and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. |
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If you are a broker-dealer and receive new notes for your own account in the exchange offer: | ||
• you must represent that you do not have any arrangement with us or any of our affiliates to distribute the new notes; | ||
• you must acknowledge that you will deliver a prospectus in connection with any resale of the new notes you receive from us in the exchange offer (the letter of transmittal states that by so acknowledging and by delivering a prospectus, you will not be deemed to admit that you are an “underwriter” within the meaning of the Securities Act); and | ||
• you may use this prospectus, as it may be amended or supplemented from time to time, in connection with the resale of new notes received in exchange for old notes acquired by you as a result of market making or other trading activities. | ||
• For a period of up to 180 days after the consummation of the exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any resale described above. See “Plan of distribution.” | ||
Federal Income Tax Considerations | The exchange of notes pursuant to the exchange offer should not be a taxable event for U.S. federal income tax purposes. See “Certain United States Federal Income Tax Considerations.” | |
Use of Proceeds | We will not receive any proceeds from the issuance of the new notes in the exchange offer. | |
Exchange Agent | Wilmington Trust FSB is the exchange agent for the exchange offer. The address and telephone number of the exchange agent are set forth in “Exchange Offer — Exchange Agent.” |
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Issuers | MagnaChip Semiconductor S.A., a société anonyme with a registered office at 74, rue de Merl, B.P. 709 L-2146 Luxembourg registered with the register of commerce and companies of Luxembourg under number B97483, and MagnaChip Semiconductor Finance Company. | |
Notes Offered | $250 million in aggregate principal amount of 10.500% Senior Notes due 2018. | |
Maturity | April 15, 2018. | |
Interest Rate | Interest on the notes will accrue at a rate of 10.500% per annum. Interest will be computed on the basis of a360-day year comprised of twelve30-day months. | |
Interest Payment Dates | Interest on the notes will be payable semi-annually on April 15 and October 15 of each year, beginning on October 15, 2010. | |
Guarantees | The notes will be fully and unconditionally guaranteed by MagnaChip Semiconductor LLC and each of its current and future subsidiaries (other than certain Immaterial Subsidiaries, MagnaChip Korea and the MagnaChip China Subsidiaries). See “Description of New Notes — The Note Guarantees.” | |
Ranking | The notes will be the issuers’ general unsecured obligations. The notes will rank pari passu in right of payment with all of the issuers’ existing and future unsecured indebtedness and other liabilities (including trade payables) and senior in right of payment to all future debt of the issuers that is expressly subordinated in right of payment to the notes (if any). | |
The notes will be effectively subordinated in right of payment to all borrowings under future secured credit facilities (to the extent of the value of the collateral securing those facilities) and to all indebtedness and other liabilities (including trade payables) of any non-guarantor subsidiaries. Our non-guarantor subsidiaries generated approximately 69.2% of our aggregate consolidated revenues for the ten-month period ended October 25, 2009 and the two-month period ended December 31, 2009, and as of December 31, 2009 held approximately 87.3% of our consolidated assets and had $166.2 million in total outstanding indebtedness and other liabilities, excluding intercompany liabilities (of which $61.8 million related to a guarantee by MagnaChip Korea of the then-existing senior secured credit facility, which was repaid |
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with a portion of the net proceeds from the offering of the old notes). | ||
The note guarantees will be the guarantors’ general unsecured obligations. Each guarantee will be effectively subordinated in right of payment to all future secured debt of the guarantor, will be pari passu in right of payment with all existing and future unsecured indebtedness and other liabilities (including trade payables) of the guarantor and senior in right of payment to any future subordinated indebtedness of the guarantor (if any). | ||
Optional Redemption | On or after April 15, 2014, we may on one or more occasions redeem some or all of the notes at any time at the redemption prices set forth under “Description of New Notes — Optional Redemption,” plus accrued and unpaid interest and special interest, if any, to the applicable redemption date. | |
In addition, at any time prior to April 15, 2013, we may on one or more occasions redeem up to 35% of the aggregate principal amount of the notes with the net cash proceeds of certain qualified equity offerings, at a redemption price equal to 110.500% of the principal amount of the notes to be redeemed plus accrued and unpaid interest and special interest, if any, to the redemption date. | ||
Also, at any time prior to April 15, 2014, we may, on one or more occasions, redeem some or all of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest and special interest, if any, to the redemption date and a “make-whole” premium. | ||
See “Description of New Notes — Optional Redemption.” | ||
Additional Amounts; Tax Redemption | Payments on the notes will be made without withholding or deduction for any current or future taxes, unless required by law. If withholding is required, we will pay such additional amounts as may be necessary in order that the net amounts received by holders of the notes will equal the amounts that would have been received if taxes had not been withheld, subject to the limitations set forth under “Description of New Notes — Additional Amounts.” | |
We may redeem the notes in whole but not in part, at our discretion, at a redemption price equal to the principal amount of the notes outstanding plus accrued and unpaid interest, special interest and additional amounts due, if any, to the redemption date, if we are or would be required to pay any such additional amounts as a result of specified changes in laws, treaties, regulations or rulings, or specified changes in application, administration or interpretation of such laws, treaties, regulations or rulings, subject to certain limitations. See “Description of New Notes — Redemption Upon Changes in Withholding Taxes.” |
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Change of Control Offer | If we experience certain change of control events, we must offer to repurchase the notes at 101% of their principal amount, plus accrued and unpaid interest and special interest, if any, to the applicable repurchase date. See “Description of New Notes — Repurchase at the Option of Holders — Change of Control.” | |
Asset Sale Offer | Under certain circumstances, if we sell assets and do not use the proceeds from the sale as specified in the indenture, we must apply the proceeds therefrom to an offer to repurchase, prepay or redeem the notes at 100% of their principal amount, plus accrued and unpaid interest and special interest, if any, to the applicable repurchase date. See “Description of New Notes — Repurchase at the Option of Holders — Asset Sales.” | |
Restrictive Covenants | The notes will be issued under an indenture containing covenants that, among other things, will restrict the ability of MagnaChip Semiconductor LLC and its restricted subsidiaries (including the issuers) to: | |
• pay dividends, redeem units, make payments with respect to subordinated indebtedness, or make other restricted payments; | ||
• incur additional indebtedness or issue preferred units; | ||
• create liens; | ||
• make certain investments; | ||
• consolidate, merge or dispose of all or substantially all of our assets, taken as a whole; | ||
• sell or otherwise transfer or dispose of assets, including equity interests of subsidiaries; | ||
• enter into sale-leaseback transactions; | ||
• enter into transactions with our affiliates; and | ||
• designate our subsidiaries as unrestricted subsidiaries. | ||
These covenants are subject to a number of important exceptions and qualifications. See “Description of New Notes — Certain Covenants.” Certain of these restrictive covenants will terminate if the notes are rated investment-grade. | ||
Risk Factors | See “Risk Factors” for a description of certain risks you should consider before deciding to tender your old notes in the exchange offer. | |
Ratio of Earnings to Fixed Charges | The following table sets forth our ratio of earnings to fixed charges for each of the periods indicated: |
Successor | Predecessor | ||||||||||||||||||||||||||||||||||
Three Months | Two- Month | Ten- Month | Three Months | ||||||||||||||||||||||||||||||||
Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||||||||||||
March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||
10.2 | — | 21.2 | — | — | — | — | — |
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Where a dash appears, our earnings were negative and were insufficient to cover fixed charges during the period. Our deficiencies to cover fixed charges in each period presented were as follows: |
Successor | Predecessor | ||||||||||||||||||||||||
Two- Month | Three Months | ||||||||||||||||||||||||
Period Ended | Ended | ||||||||||||||||||||||||
December 31, | March 29, | Years Ended December 31, | |||||||||||||||||||||||
2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Deficiencies | $ | 0.5 | $ | 69.6 | $ | 327.5 | $ | 132.0 | $ | 78.8 | $ | 119.2 |
See “Ratio of Earnings to Fixed Charges” for additional information. | ||
No Established Trading Market | There is no established trading market for the new notes. The new notes are not listed on any securities exchange or on any automated dealer quotation system. We cannot assure you that an active or liquid trading market for the new notes will develop. If an active or liquid trading market for the new notes does not develop, the market price and liquidity of the new notes may be adversely affected. |
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Pro Forma(1) | Historical | ||||||||||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||||||||||
Three | Three | Three | |||||||||||||||||||||||||||||||
Months | Months | Two- Month | Ten- Month | Months | |||||||||||||||||||||||||||||
Ended | Year Ended | Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||||||||
March 31, | December 31, | March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2010* | 2009** | 2009** | 2009* | 2008** | 2007** | ||||||||||||||||||||||||||
(In millions, except per common unit data) | |||||||||||||||||||||||||||||||||
Statements of Operations Data: | |||||||||||||||||||||||||||||||||
Net sales | $ | 179.5 | $ | 560.1 | $ | 179.5 | $ | 111.1 | $ | 449.0 | $ | 101.5 | $ | 601.7 | $ | 709.5 | |||||||||||||||||
Cost of sales | 129.3 | 378.9 | 130.1 | 90.4 | 311.1 | 80.6 | 445.3 | 578.9 | |||||||||||||||||||||||||
Gross profit | 50.2 | 181.2 | 49.4 | 20.7 | 137.8 | 20.9 | 156.4 | 130.7 | |||||||||||||||||||||||||
Selling, general and administrative expenses | 17.9 | 71.6 | 17.9 | 14.5 | 56.3 | 15.3 | 81.3 | 82.7 | |||||||||||||||||||||||||
Research and development expenses | 20.5 | 77.3 | 20.5 | 14.7 | 56.1 | 17.0 | 89.5 | 90.8 | |||||||||||||||||||||||||
Restructuring and impairment charges | 0.3 | 0.4 | 0.3 | — | 0.4 | 0.1 | 13.4 | 12.1 | |||||||||||||||||||||||||
Operating income (loss) from continuing operations | 11.5 | 31.9 | 10.6 | (8.6 | ) | 25.0 | (11.4 | ) | (27.7 | ) | (54.9 | ) | |||||||||||||||||||||
Interest expense, net | (6.9 | ) | (28.8 | ) | (2.0 | ) | (1.3 | ) | (31.2 | ) | (14.7 | ) | (76.1 | ) | (60.3 | ) | |||||||||||||||||
Foreign currency gain (loss), net | 21.6 | 52.8 | 21.6 | 9.3 | 43.4 | (40.2 | ) | (210.4 | ) | (4.7 | ) | ||||||||||||||||||||||
Reorganization items, net | — | — | — | — | 804.6 | — | — | — | |||||||||||||||||||||||||
Others | (0.1 | ) | — | (0.1 | ) | — | — | — | — | — | |||||||||||||||||||||||
14.7 | 24.0 | 19.5 | 8.1 | 816.8 | (54.9 | ) | (286.5 | ) | (65.0 | ) | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 26.1 | 55.9 | 30.1 | (0.5 | ) | 841.8 | (66.3 | ) | (314.3 | ) | (120.0 | ) | |||||||||||||||||||||
Income tax expenses (benefits) | (1.0 | ) | 9.2 | (1.0 | ) | 1.9 | 7.3 | 2.6 | 11.6 | 8.8 | |||||||||||||||||||||||
Income (loss) from continuing operations | $ | 27.1 | $ | 46.6 | 31.1 | (2.5 | ) | 834.5 | (68.9 | ) | (325.8 | ) | (128.8 | ) | |||||||||||||||||||
Income (loss) from discontinued operations, net of taxes | — | 0.5 | 6.6 | (0.8 | ) | (91.5 | ) | (51.7 | ) | ||||||||||||||||||||||||
Net income (loss) | $ | 31.1 | $ | (2.0 | ) | $ | 841.1 | $ | (69.7 | ) | $ | (417.3 | ) | $ | (180.6 | ) | |||||||||||||||||
Dividends accrued on preferred units | — | — | — | 6.3 | 3.4 | 13.3 | 12.0 | ||||||||||||||||||||||||||
Income (loss) from continuing operations attributable to common units | $ | 46.6 | $ | 31.1 | $ | (2.5 | ) | $ | 828.2 | $ | (72.3 | ) | $ | (339.1 | ) | $ | (140.9 | ) | |||||||||||||||
Per common unit data: | |||||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations per common unit — Basic and diluted | $ | 0.09 | $ | 0.16 | $ | 0.10 | $ | (0.01 | ) | $ | 15.65 | $ | (1.37 | ) | $ | (6.43 | ) | $ | (2.69 | ) | |||||||||||||
Weighted average number of common units — | |||||||||||||||||||||||||||||||||
Basic | 302.444 | 300.158 | 302.444 | 300.863 | 52.923 | 52.923 | 52.769 | 52.297 | |||||||||||||||||||||||||
Diluted | 307.536 | 300.166 | 307.536 | 300.863 | 52.923 | 52.923 | 52.769 | 52.297 | |||||||||||||||||||||||||
Consolidated Balance Sheet Data (at period end): | |||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 128.8 | $ | 82.7 | $ | 64.9 | $ | 7.1 | $ | 4.0 | $ | 64.3 | |||||||||||||||||||||
Total assets | 546.2 | 492.0 | 453.3 | 357.7 | 399.2 | 707.9 | |||||||||||||||||||||||||||
Total indebtedness(2) | 246.7 | 61.6 | 61.8 | 845.0 | 845.0 | 830.0 | |||||||||||||||||||||||||||
Long-term obligations(3) | 247.0 | 61.3 | 61.5 | 146.5 | 143.2 | 879.4 | |||||||||||||||||||||||||||
Total unitholders’ equity (deficit) | 100.5 | 231.4 | 215.7 | (835.1 | ) | (787.8 | ) | (477.5 | ) | ||||||||||||||||||||||||
Supplemental Data (unaudited): | |||||||||||||||||||||||||||||||||
Adjusted EBITDA(4) | $ | 28.7 | $ | 98.7 | $ | 28.7 | $ | 22.1 | $ | 76.6 | $ | 2.3 | $ | 59.8 | $ | 111.2 | |||||||||||||||||
Adjusted Net Income (Loss)(5) | 15.0 | 33.7 | 19.9 | 13.3 | 9.3 | (22.9 | ) | (71.7 | ) | (82.6 | ) |
* | Derived from our unaudited interim consolidated financial statements. | |
** | Derived from our audited consolidated financial statements. |
(1) | Gives effect to the reorganization proceedings and related events and the issuance of $250 million old notes and the application of the net proceeds therefrom. For details regarding these pro forma adjustments, see the notes to the unaudited pro forma condensed consolidated financial information in “Unaudited Pro Forma Consolidated Financial Information.” | |
(2) | Total indebtedness is calculated as long and short-term borrowings, including the current portion of long-term borrowings. | |
(3) | Long-term obligations include long-term borrowings, capital leases and redeemable convertible preferred units. |
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(4) | We define Adjusted EBITDA as net income (loss) less income (loss) from discontinued operations, net of taxes, adjusted to exclude (i) depreciation and amortization associated with continuing operations, (ii) interest expense, net, (iii) income tax expense, (iv) restructuring and impairment charges, (v) other restructuring charges, (vi) abandoned IPO expenses, (vii) subcontractor claim settlement, (viii) the increase in cost of sales resulting from the fresh-start accounting inventorystep-up, (ix) equity-based compensation expense, (x) reorganization items, net, and (xi) foreign currency gain (loss), net. See the footnotes to the table below for further information regarding these items. In the case of pro forma Adjusted EBITDA, we exclude the items above from income (loss) from continuing operations. We present Adjusted EBITDA as a supplemental measure of our performance because: | |
• Adjusted EBITDA eliminates the impact of a number of items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance; | ||
• we believe that Adjusted EBITDA is an enterprise level performance measure commonly reported and widely used by analysts and investors in our industry; | ||
• we anticipate that our investor and analyst presentations when and if we are public will include Adjusted EBITDA; and | ||
• we believe that Adjusted EBITDA provides investors with a more consistent measurement of period to period performance of our core operations, as well as a comparison of our operating performance to that of other companies in our industry. | ||
We use Adjusted EBITDA in a number of ways, including: | ||
• for planning purposes, including the preparation of our annual operating budget; | ||
• to evaluate the effectiveness of our enterprise level business strategies; | ||
• in communications with our board of directors concerning our consolidated financial performance; and | ||
• in certain of our compensation plans as a performance measure for determining incentive compensation payments. |
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We encourage you to evaluate each adjustment and the reasons we consider them appropriate. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Adjusted EBITDA is not a measure defined in accordance with GAAP and should not be construed as an alternative to income from continuing operations, cash flows from operating activities or net income (loss), as determined in accordance with GAAP. A reconciliation of net income (loss) to Adjusted EBITDA is as follows: |
Pro Forma | Historical | ||||||||||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||||||||||
Three | Three | Three | |||||||||||||||||||||||||||||||
Months | Months | Two- Month | Ten- Month | Months | |||||||||||||||||||||||||||||
Ended | Year Ended | Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||||||||
March 31, | December 31, | March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||
Net income (loss) | $ | 31.1 | $ | (2.0 | ) | $ | 841.1 | $ | (69.7 | ) | $ | (417.3 | ) | $ | (180.6 | ) | |||||||||||||||||
Less: Income (loss) from discontinued operations, net of taxes | — | 0.5 | 6.6 | (0.8 | ) | (91.5 | ) | (51.7 | ) | ||||||||||||||||||||||||
Income (loss) from continuing operations | $ | 27.1 | $ | 46.6 | 31.1 | (2.5 | ) | 834.5 | (68.9 | ) | (325.8 | ) | (128.8 | ) | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||
Depreciation and amortization associated with continuing operations | 15.5 | 50.6 | 15.5 | 11.2 | 37.7 | 10.4 | 63.8 | 152.2 | |||||||||||||||||||||||||
Interest expense, net | 6.9 | 28.8 | 2.0 | 1.3 | 31.2 | 14.7 | 76.1 | 60.3 | |||||||||||||||||||||||||
Income tax expenses (benefits) | (1.0 | ) | 9.2 | (1.0 | ) | 1.9 | 7.3 | 2.6 | 11.6 | 8.8 | |||||||||||||||||||||||
Restructuring and impairment charges(a) | 0.3 | 0.4 | 0.3 | — | 0.4 | 0.1 | 13.4 | 12.1 | |||||||||||||||||||||||||
Other restructuring charges(b) | — | 13.3 | — | — | 13.3 | 3.1 | 6.2 | — | |||||||||||||||||||||||||
Abandoned IPO expenses(c) | — | — | — | — | — | — | 3.7 | — | |||||||||||||||||||||||||
Subcontractor claim settlement(d) | — | — | — | — | — | — | — | 1.3 | |||||||||||||||||||||||||
Reorganization items, net(e) | — | — | — | — | (804.6 | ) | — | — | — | ||||||||||||||||||||||||
Inventorystep-up(f) | — | — | 0.9 | 17.2 | — | — | — | — | |||||||||||||||||||||||||
Equity-based compensation expense(g) | 1.5 | 2.4 | 1.5 | 2.2 | 0.2 | 0.1 | 0.5 | 0.6 | |||||||||||||||||||||||||
Foreign currency loss (gain), net(h) | (21.6 | ) | (52.8 | ) | (21.6 | ) | (9.3 | ) | (43.4 | ) | 40.2 | 210.4 | 4.7 | ||||||||||||||||||||
Adjusted EBITDA | $ | 28.7 | $ | 98.7 | $ | 28.7 | $ | 22.1 | $ | 76.6 | $ | 2.3 | $ | 59.8 | $ | 111.2 | |||||||||||||||||
(a) | This adjustment is comprised of all items included in the restructuring and impairment charges line item on our consolidated statements of operations, and eliminates the impact of restructuring and impairment charges related to (i) for the three months ended March 31, 2010, impairment of two abandoned in-process research and development projects, accounted for as indefinite-lived intangible assets as part of the application of fresh-start accounting, (ii) for the three months ended March 29, 2009, the closure of our research and development facilities in Japan, (iii) for 2009, termination benefits and other related costs, for the ten-month period ended October 25, 2009 in connection with the closure of one of our research and development facilities in Japan, (iv) for 2008, goodwill impairment triggered by the significant adverse change in the revenue of our mobile display solutions, or MDS reporting unit, and a reversal of a portion of the restructuring accrual related to the closure of our Gumi five-inch wafer fabrication facilities in 2007, and (v) for 2007, the closure of our Gumi five-inch wafer fabrication facilities. We do not believe these restructuring and impairment charges are indicative of our core ongoing operating performance because we do not anticipate similar facility closures and market driven events in our ongoing operations, although we cannot guarantee that similar events will not occur in the future. | |
(b) | This adjustment relates to certain restructuring charges that are not included in the restructuring and impairment charges line item on our consolidated statements of operations. These items are included in selling, general and administrative expenses in our consolidated statements of operations. These charges are comprised of the following: (i) for the three months ended March 29, 2009, a charge of $3.1 million for restructuring-related professional fees and related expenses, (ii) for 2009, a charge of $13.3 million for restructuring-related professional fees and related expenses and (iii) for 2008, a charge of $6.2 million for restructuring-related professional fees and related expenses. We do not believe these other restructuring charges are indicative of our core ongoing operating performance because these charges were related, in significant part, to actions we took in response to the impacts |
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on our business resulting from the global economic recession that persisted through 2008 and 2009. We cannot guarantee that similar charges will not be incurred in the future. | ||
(c) | This adjustment eliminates a $3.7 million charge in 2008 related to expenses incurred in connection with our abandoned initial public offering in 2008. We do not believe that these charges are indicative of our core operating performance. We have incurred similar costs in connection with the MagnaChip Corporation IPO. | |
(d) | This adjustment eliminates a $1.3 million charge attributable to a one-time settlement of claims with a subcontractor. We no longer obtain services from this subcontractor and do not expect to incur similar charges in the future. | |
(e) | This adjustment eliminates the impact of largely non-cash reorganization income and expense items directly associated with our reorganization proceedings from our ongoing operations including, among others, professional fees, the revaluation of assets, the effects of the Chapter 11 reorganization plan and fresh-start accounting principles and the write-off of debt issuance costs. Included in reorganization items, net for the period from January 1 to October 25, 2009 was our predecessor’s gain recognized from the effects of our reorganization proceedings. The gain results from the difference between our predecessor’s carrying value of remaining pre-petition liabilities subject to compromise and the amounts to be distributed pursuant to the reorganization proceedings. The gain from the effects of the reorganization proceedings and the application of fresh-start accounting principles is comprised of the discharge of liabilities subject to compromise, net of the issuance of new common units and new warrants and the accrual of amounts to be settled in cash. For details regarding this adjustment, see note 5 to the consolidated financial statements of MagnaChip Semiconductor LLC for the ten-month period ended October 25, 2009 and the two-month period ended December 31, 2009 included elsewhere in this prospectus. We do not believe these items are indicative of our core ongoing operating performance because they were incurred as a result of our Chapter 11 reorganization. | |
(f) | This adjustment eliminates the one-time impact on cost of sales associated with thewrite-up of our inventory in accordance with the principles of fresh-start accounting upon consummation of the Chapter 11 reorganization. | |
(g) | This adjustment eliminates the impact of non-cash equity-based compensation expenses. Although we expect to incur non-cash equity-based compensation expenses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these non-cash expenses, as supplemental information. | |
(h) | This adjustment eliminates the impact of non-cash foreign currency translation associated with intercompany debt obligations and foreign currency denominated receivables and payables, as well as the cash impact of foreign currency transaction gains or losses on collection of such receivables and payment of such payables. Although we expect to incur foreign currency translation gains or losses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these primarily non-cash gains or losses, as supplemental information. |
• Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; | ||
• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; | ||
• Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; |
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• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; | ||
• Adjusted EBITDA does not consider the potentially dilutive impact of issuing equity-based compensation to our management team and employees; | ||
• Adjusted EBITDA does not reflect the costs of holding certain assets and liabilities in foreign currencies; and | ||
• other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
(5) | We present Adjusted Net Income as a further supplemental measure of our performance. We prepare Adjusted Net Income by adjusting net income (loss) to eliminate the impact of a number of non-cash expenses and other items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance. We believe that Adjusted Net Income is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. | |
We present Adjusted Net Income for a number of reasons, including: | ||
• we use Adjusted Net Income in communications with our board of directors concerning our consolidated financial performance; | ||
• we believe that Adjusted Net Income is an enterprise level performance measure commonly reported and widely used by analysts and investors in our industry; and | ||
• we anticipate that our investor and analyst presentations when and if we are public will include Adjusted Net Income. |
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Pro Forma | Historical | ||||||||||||||||||||||||||||||||
Three | Successor | Predecessor | |||||||||||||||||||||||||||||||
Months | Three Months | Two- Month | Ten- Month | Three Months | |||||||||||||||||||||||||||||
Ended | Year Ended | Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||||||||
March 31, | December 31, | March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||
Net income (loss) | $ | 31.1 | $ | (2.0 | ) | $ | 841.1 | $ | (69.7 | ) | $ | (417.3 | ) | $ | (180.6 | ) | |||||||||||||||||
Less: Income (loss) from discontinued operations, net of taxes | — | 0.5 | 6.6 | (0.8 | ) | (91.5 | ) | (51.7 | ) | ||||||||||||||||||||||||
Income (loss) from continuing operations | $ | 27.1 | $ | 46.6 | 31.1 | (2.5 | ) | 834.5 | (68.9 | ) | (325.8 | ) | (128.8 | ) | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||
Restructuring and impairment charges(a) | 0.3 | 0.4 | 0.3 | — | 0.4 | 0.1 | 13.4 | 12.1 | |||||||||||||||||||||||||
Other restructuring charges(b) | — | 13.3 | — | — | 13.3 | 3.1 | 6.2 | — | |||||||||||||||||||||||||
Abandoned IPO expenses(c) | — | — | — | — | — | — | 3.7 | — | |||||||||||||||||||||||||
Subcontractor claim settlement(d) | — | — | — | — | — | — | — | 1.3 | |||||||||||||||||||||||||
Reorganization items, net(e) | — | — | — | — | (804.6 | ) | — | — | — | ||||||||||||||||||||||||
Inventorystep-up(f) | — | — | 0.9 | 17.2 | — | — | — | — | |||||||||||||||||||||||||
Equity based compensation expense(g) | 1.5 | 2.4 | 1.5 | 2.2 | 0.2 | 0.1 | 0.5 | 0.6 | |||||||||||||||||||||||||
Amortization of intangibles associated with continuing operations(h) | 7.7 | 23.6 | 7.7 | 5.6 | 8.8 | 2.4 | 20.0 | 27.5 | |||||||||||||||||||||||||
Foreign currency loss (gain), net(i) | (21.6 | ) | (52.8 | ) | (21.6 | ) | (9.3 | ) | (43.4 | ) | 40.2 | 210.4 | 4.7 | ||||||||||||||||||||
Adjusted Net income (loss) | $ | 15.0 | $ | 33.7 | $ | 19.9 | $ | 13.3 | $ | 9.3 | $ | (22.9 | ) | $ | (71.7 | ) | $ | (82.6 | ) | ||||||||||||||
(a) | This adjustment is comprised of all items included in the restructuring and impairment charges line item on our consolidated statements of operations, and eliminates the impact of restructuring and impairment charges related to (i) for the three months ended March 31, 2010, impairment of two abandoned in-process research and development projects, accounted for as indefinite-lived intangible assets as part of the application of fresh-start accounting, (ii) for the three months ended March 29, 2009, the closure of our research and development facilities in Japan, (iii) for 2009, termination benefits and other related costs, for the ten-month period ended October 25, 2009 in connection with the closure of one of our research and development facilities in Japan, (iv) for 2008, goodwill impairment triggered by the significant adverse change in the revenue of our MDS reporting unit and a reversal of a portion of the restructuring accrual related to the closure of our Gumi five-inch wafer fabrication facilities in 2007, and (v) for 2007, the closure of our Gumi five-inch wafer fabrication facilities. We do not believe these restructuring and impairment charges are indicative of our core ongoing operating performance because we do not anticipate similar facility closures and market driven events in our ongoing operations, although we cannot guarantee that similar events will not occur in the future. | |
(b) | This adjustment relates to certain restructuring charges that are not included in the restructuring and impairment charges line item on our consolidated statements of operations. These items are included in selling, general and administrative expenses in our consolidated statements of operations. These charges are comprised of the following: (i) for the three months ended March 29, 2009, a charge of $3.1 million for restructuring-related professional fees and related expenses, (ii) for 2009, a charge of $13.3 million for restructuring-related professional fees and related expenses, and (iii) for 2008, a charge of $6.2 million for restructuring-related professional fees and related expenses. We do not believe these other restructuring charges are indicative of our core ongoing operating performance because these charges were related, in significant part, to actions we took in response to the impacts on our business resulting from the global economic recession that persisted through 2008 and 2009. We cannot guarantee that similar charges will not be incurred in the future. |
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(c) | This adjustment eliminates a $3.7 million charge in 2008 related to expenses incurred in connection with our abandoned initial public offering in 2008. We do not believe that these charges are indicative of our core operating performance. We have incurred similar costs in connection with the MagnaChip Corporation IPO. | |
(d) | This adjustment eliminates a $1.3 million charge attributable to a one-time settlement of claims with a subcontractor. We no longer obtain services from this subcontractor and do not expect to incur similar charges in the future. | |
(e) | This adjustment eliminates the impact of largely non-cash reorganization income and expense items directly associated with our reorganization proceedings from our ongoing operations including, among others, professional fees, the revaluation of assets, the effects of the Chapter 11 reorganization plan and fresh-start accounting principles and the write-off of debt issuance costs. Included in reorganization items, net for the ten-month period ended October 25, 2009 was our predecessor’s gain recognized from the effects of our reorganization proceedings. The gain results from the difference between our predecessor’s carrying value of remaining pre-petition liabilities subject to compromise and the amounts to be distributed pursuant to the reorganization proceedings. The gain from the effects of the reorganization proceedings and the application of fresh-start accounting principles is comprised of the discharge of liabilities subject to compromise, net of the issuance of new common units and new warrants and the accrual of amounts to be settled in cash. For details regarding this adjustment, see note 5 to the consolidated financial statements of MagnaChip Semiconductor LLC for the ten months ended October 25, 2009 and the two months ended December 31, 2009 included elsewhere in this prospectus. We do not believe these items are indicative of our core ongoing operating performance because they were incurred as a result of our reorganization proceedings. | |
(f) | This adjustment eliminates the one-time impact on cost of sales associated with thewrite-up of our inventory in accordance with the principles of fresh-start accounting upon consummation of the Chapter 11 reorganization. | |
(g) | This adjustment eliminates the impact of non-cash equity-based compensation expenses. Although we expect to incur non-cash equity-based compensation expenses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these non-cash expenses, as supplemental information. | |
(h) | This adjustment eliminates the non-cash impact of amortization expense for intangible assets created as a result of the purchase accounting treatment of the Original Acquisition and other subsequent acquisitions, and from the application of fresh-start accounting in connection with the reorganization proceedings. We do not believe these non-cash amortization expenses for intangibles are indicative of our core ongoing operating performance because the assets would not have been capitalized on our balance sheet but for the application of purchase accounting or fresh-start accounting, as applicable. | |
(i) | This adjustment eliminates the impact of non-cash foreign currency translation associated with intercompany debt obligations and foreign currency denominated receivables and payables, as well as the cash impact of foreign currency transaction gains or losses on collection of such receivables and payment of such payables. Although we expect to incur foreign currency translation gains or losses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these primarily non-cash gains or losses, as supplemental information. |
• | Adjusted Net Income does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; |
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• | Adjusted Net Income does not reflect changes in, or cash requirements for, our working capital needs; | |
• | Adjusted Net Income does not consider the potentially dilutive impact of issuing equity-based compensation to our management team and employees; | |
• | Adjusted Net Income does not reflect the costs of holding certain assets and liabilities in foreign currencies; and | |
• | other companies in our industry may calculate Adjusted Net Income differently than we do, limiting its usefulness as a comparative measure. |
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• | result in an event of default if we fail to satisfy our obligations under the notes or our other debt or fail to comply with the financial and other restrictive covenants contained in the indenture governing the notes or agreements governing our other indebtedness, which event of default could result in all of our debt becoming immediately due and payable and could permit our lenders to foreclose on the assets securing any such debt; | |
• | require us to dedicate a substantial portion of our cash flow from our business operations to pay our debt, thereby reducing the availability of cash flow to fund working capital, capital expenditures, development projects, general operational requirements and other purposes; | |
• | limit our ability to obtain additional financing for working capital, capital expenditures and other activities; | |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; | |
• | increase our vulnerability to general adverse economic and industry conditions or a downturn in our business; | |
• | place us at a competitive disadvantage compared to competitors that are not as highly leveraged; and | |
• | negatively affect our ability to fund a change of control offer. |
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• | pay dividends, redeem units or make other distributions with respect to equity interests, make payments with respect to subordinated indebtedness or other restricted payments; | |
• | incur debt or issue preferred units; | |
• | create liens; | |
• | make certain investments; | |
• | consolidate, merge or dispose of all or substantially all of our assets, taken as a whole; | |
• | sell or otherwise transfer or dispose of assets, including equity interests of our subsidiaries; | |
• | enter into sale-leaseback transactions; | |
• | enter into transactions with our affiliates; and | |
• | designate our subsidiaries as unrestricted subsidiaries. |
• | their earnings; | |
• | covenants contained in our debt agreements (including the indenture governing the notes) and the debt agreements of our subsidiaries; | |
• | covenants contained in other agreements to which we or our subsidiaries are or may become subject; | |
• | business and tax considerations; and | |
• | applicable law. |
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• | such subsidiary guarantor received less than reasonably equivalent value or fair consideration for the incurrence of its guarantee; and | |
• | such subsidiary guarantor: |
• | was insolvent at the time of (or was rendered insolvent by) the incurrence of the guarantee; | |
• | was engaged or about to engage in a business or transaction for which its assets constituted unreasonably small capital to carry on its business; or | |
• | intended to incur, or believed that it would incur, obligations beyond its ability to pay as those obligations matured. |
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• | our ability to offer cost-effective and high quality products and services on a timely basis using our technologies; | |
• | our ability to accurately identify and respond to emerging technological trends and demand for product features and performance characteristics; | |
• | our ability to continue to rapidly introduce new products that are accepted by the market; | |
• | our ability to adopt or adapt to emerging industry standards; | |
• | the number and nature of our competitors and competitiveness of their products and services in a given market; | |
• | entrance of new competitors into our markets; | |
• | our ability to enter the highly competitive power management market; and | |
• | our ability to continue to offer in demand semiconductor manufacturing services at competitive prices. |
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• | pay substantial damages or indemnify customers or licensees for damages they may suffer if the products they purchase from us or the technology they license from us violate the intellectual property rights of others; |
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• | stop our manufacture, use, sale or importation of infringing products; expend significant resources to develop or acquire non-infringing technologies; | |
• | discontinue processes; or | |
• | obtain licenses to the intellectual property we are found to have infringed. |
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• | increasing our vulnerability to general economic and industry conditions; | |
• | requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; | |
• | limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; and | |
• | limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who have less debt. |
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Successor | Predecessor | ||||||||||||||||||||||||||||||||
Three Months | Two- Month | Ten- Month | Three Months | ||||||||||||||||||||||||||||||
Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||||||||||
March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||
Ratio of earnings to fixed charges | 10.2 | — | 21.2 | — | — | — | — | — |
Successor | Predecessor | ||||||||||||||||||||||||
Two- Month | Three Months | ||||||||||||||||||||||||
Period Ended | Ended | Years Ended | |||||||||||||||||||||||
December 31, | March 29, | December 31, | |||||||||||||||||||||||
2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Deficiencies | $ | 0.5 | $ | 69.6 | $ | 327.5 | $ | 132.0 | $ | 78.8 | $ | 119.2 |
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• | the actual capitalization of MagnaChip Semiconductor LLC as of March 31, 2010; and | |
• | our pro forma as adjusted capitalization as of March 31, 2010 after giving effect to the issuance of $250 million old notes and the application of the net proceeds therefrom. |
As of March 31, 2010 | ||||||||
Pro Forma | ||||||||
Actual | as Adjusted | |||||||
(In millions) | ||||||||
Indebtedness (including current maturities) | ||||||||
Senior secured credit facility | $ | 61.6 | $ | — | ||||
10.500% senior notes due 2018(1) | — | 246.7 | ||||||
Unitholders’ equity: | ||||||||
Common units, no par value; 375,000,000 units authorized, 307,233,996 units issued and outstanding, actual and pro forma as adjusted | 55.5 | 55.5 | ||||||
Additional paid-in capital | 169.3 | 38.6 | (2) | |||||
Retained earnings | 29.1 | 28.9 | ||||||
Accumulated other comprehensive loss | (22.4 | ) | (22.4 | ) | ||||
Total unitholders’ equity | 231.4 | 100.5 | ||||||
Total capitalization | $ | 293.0 | $ | 347.2 | ||||
(1) | Represents principal amount of notes net of original issue discount of $3.3 million. | |
(2) | Reflects a $130.7 million distribution to unitholders using a portion of the proceeds from the issuance of our $250 million in aggregate principal amount of old notes. |
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Successor(1) | Predecessor | ||||||||||||||||||||||||||||||||
Three Months | Two-Month | Ten-Month | Three Months | ||||||||||||||||||||||||||||||
Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||||||||||
March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||||||||||
2010* | 2009** | 2009** | 2009* | 2008** | 2007** | 2006** | 2005** | ||||||||||||||||||||||||||
(In millions, except per common unit data) | |||||||||||||||||||||||||||||||||
Statements of Operations Data: | |||||||||||||||||||||||||||||||||
Net sales | $ | 179.5 | $ | 111.1 | $ | 449.0 | $ | 101.5 | $ | 601.7 | $ | 709.5 | $ | 683.9 | $ | 774.3 | |||||||||||||||||
Cost of sales | 130.1 | 90.4 | 311.1 | 80.6 | 445.3 | 578.9 | 580.4 | 591.1 | |||||||||||||||||||||||||
Gross profit | 49.4 | 20.7 | 137.8 | 20.9 | 156.4 | 130.7 | 103.4 | 183.2 | |||||||||||||||||||||||||
Selling, general and administrative Expenses | 17.9 | 14.5 | 56.3 | 15.3 | 81.3 | 82.7 | 76.1 | 119.4 | |||||||||||||||||||||||||
Research and development expenses | 20.5 | 14.7 | 56.1 | 17.0 | 89.5 | 90.8 | 87.2 | 96.1 | |||||||||||||||||||||||||
Restructuring and impairment charges | 0.3 | — | 0.4 | 0.1 | 13.4 | 12.1 | 1.7 | 36.1 | |||||||||||||||||||||||||
Operating income (loss) from continuing Operations | 10.6 | (8.6 | ) | 25.0 | (11.4 | ) | (27.7 | ) | (54.9 | ) | (61.6 | ) | (68.4 | ) | |||||||||||||||||||
Interest expense, net | (2.0 | ) | (1.3 | ) | (31.2 | ) | (14.7 | ) | (76.1 | ) | (60.3 | ) | (57.2 | ) | (57.2 | ) | |||||||||||||||||
Foreign currency gain (loss), net | 21.6 | 9.3 | 43.4 | (40.2 | ) | (210.4 | ) | (4.7 | ) | 50.9 | 16.5 | ||||||||||||||||||||||
Reorganization items, net | — | — | 804.6 | — | — | — | — | — | |||||||||||||||||||||||||
Others | (0.1 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||||
19.5 | 8.1 | 816.8 | (54.9 | ) | (286.5 | ) | (65.0 | ) | (6.3 | ) | (40.7 | ) | |||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 30.1 | (0.5 | ) | 841.8 | (66.3 | ) | (314.3 | ) | (120.0 | ) | (67.9 | ) | (109.1 | ) | |||||||||||||||||||
Income tax expenses (benefits) | (1.0 | ) | 1.9 | 7.3 | 2.6 | 11.6 | 8.8 | 9.1 | 2.0 | ||||||||||||||||||||||||
Income (loss) from continuing Operations | 31.1 | (2.5 | ) | 834.5 | (68.9 | ) | (325.8 | ) | (128.8 | ) | (76.9 | ) | (111.1 | ) | |||||||||||||||||||
Income (loss) from discontinued operations, net of taxes | — | 0.5 | 6.6 | (0.8 | ) | (91.5 | ) | (51.7 | ) | (152.4 | ) | 10.2 | |||||||||||||||||||||
Net income (loss) | $ | 31.1 | $ | (2.0 | ) | $ | 841.1 | $ | (69.7 | ) | $ | (417.3 | ) | $ | (180.6 | ) | $ | (229.3 | ) | $ | (100.9 | ) | |||||||||||
Dividends accrued on preferred units | — | — | 6.3 | 3.4 | 13.3 | 12.0 | 10.9 | 9.9 | |||||||||||||||||||||||||
Income (loss) from continuing operations attributable to common units | $ | 31.1 | $ | (2.5 | ) | $ | 828.2 | $ | (72.3 | ) | $ | (339.1 | ) | $ | (140.9 | ) | $ | (87.9 | ) | $ | (121.1 | ) | |||||||||||
Net income (loss) attributable to common Units | $ | 31.1 | $ | (2.0 | ) | $ | 834.8 | $ | (73.1 | ) | $ | (430.6 | ) | $ | (192.6 | ) | $ | (240.2 | ) | $ | (110.8 | ) | |||||||||||
Per unit data: | |||||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations per common unit — Basic and diluted | $ | 0.10 | $ | (0.01 | ) | $ | 15.65 | $ | (1.37 | ) | $ | $(6.43 | ) | $ | (2.69 | ) | $ | (1.66 | ) | $ | (2.29 | ) | |||||||||||
Earnings (loss) from discontinued operations per common unit — Basic and diluted | $ | — | $ | 0.00 | $ | 0.12 | $ | (0.01 | ) | $ | (1.73 | ) | $ | (0.99 | ) | $ | (2.88 | ) | $ | 0.19 | |||||||||||||
Earnings (loss) per common unit — Basic and diluted | $ | 0.10 | $ | (0.01 | ) | $ | 15.77 | $ | (1.38 | ) | $ | (8.16 | ) | $ | (3.68 | ) | $ | (4.54 | ) | $ | (2.10 | ) | |||||||||||
Weighted average number of common units | |||||||||||||||||||||||||||||||||
Basic | 302.444 | 300.863 | 52.923 | 52.923 | 52.769 | 52.297 | 52.912 | 52.898 | |||||||||||||||||||||||||
Diluted | 307.536 | 300.863 | 52.923 | 52.923 | 52.769 | 52.297 | 52.912 | 52.898 | |||||||||||||||||||||||||
Balance Sheet Data (at period end): | |||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 82.7 | $ | 64.9 | $ | 7.1 | $ | 4.0 | $ | 64.3 | $ | 89.2 | $ | 86.6 | |||||||||||||||||||
Total assets | 492.0 | 453.3 | 357.7 | 399.2 | 707.9 | 770.1 | 1,040.6 | ||||||||||||||||||||||||||
Total indebtedness(2) | 61.6 | 61.8 | 845.0 | 845.0 | 830.0 | 750.0 | 750.0 | ||||||||||||||||||||||||||
Long-term obligations(3) | 61.3 | 61.5 | 146.5 | 143.2 | 879.4 | 867.4 | 856.7 | ||||||||||||||||||||||||||
Unitholders’ equity | 231.4 | 215.7 | (835.1 | ) | (787.8 | ) | (477.5 | ) | (284.5 | ) | (46.5 | ) | |||||||||||||||||||||
Supplemental Data (unaudited): | |||||||||||||||||||||||||||||||||
Adjusted EBITDA(4) | $ | 28.7 | $ | 22.1 | $ | 76.6 | $ | 2.3 | $ | 59.8 | $ | 111.2 | |||||||||||||||||||||
Adjusted Net Income (Loss)(5) | 19.9 | 13.3 | 9.3 | (22.9 | ) | (71.7 | ) | (82.6 | ) |
* | Derived from our unaudited interim consolidated financial statements. | |
** | Derived from our audited consolidated financial statements. | |
(1) | As of October 25, 2009, the fresh-start adoption date, we adopted fresh-start accounting for our consolidated financial statements. Because of the emergence from reorganization proceedings and adoption of fresh-start accounting, the historical financial information for periods after October 25, 2009 is not fully comparable to periods before October 25, 2009. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Changes to Our Business.” | |
(2) | Total indebtedness is calculated as long and short-term borrowings, including the current portion of long-term borrowings. |
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(3) | Long-term obligations include long-term borrowings, capital leases and redeemable convertible preferred units. | |
(4) | We define Adjusted EBITDA as net income (loss) less income (loss) from discontinued operations, net of taxes, adjusted to exclude (i) depreciation and amortization associated with continuing operations, (ii) interest expense, net, (iii) income tax expenses, (iv) restructuring and impairment charges, (v) other restructuring charges, (vi) abandoned IPO expenses, (vii) subcontractor claim settlement, (viii) the increase in cost of sales resulting from the fresh-start inventory accountingstep-up, (ix) equity-based compensation expense, (x) reorganization items, net and (xi) foreign currency gain (loss), net. See the footnotes to the table below for further information regarding these items. We present Adjusted EBITDA as a supplemental measure of our performance because: |
• | Adjusted EBITDA eliminates the impact of a number of items that may be either one time or recurring items that we do not consider to be indicative of our core ongoing operating performance; | |
• | we believe that Adjusted EBITDA is an enterprise level performance measure commonly reported and widely used by analysts and investors in our industry; | |
• | we anticipate that our investor and analyst presentations when and if we are public will include Adjusted EBITDA; and | |
• | we believe that Adjusted EBITDA provides investors with a more consistent measurement of period to period performance of our core operations, as well as a comparison of our operating performance to that of other companies in our industry. |
• | for planning purposes, including the preparation of our annual operating budget; | |
• | to evaluate the effectiveness of our enterprise level business strategies; | |
• | in communications with our board of directors concerning our consolidated financial performance; and | |
• | in certain of our compensation plans as a performance measure for determining incentive compensation payments. |
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Historical | |||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||
Three Months | Two-Month | Ten-Month | Three Months | ||||||||||||||||||||||
Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||
March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Net income (loss) | $ | 31.1 | $ | (2.0 | ) | $ | 841.1 | $ | (69.7 | ) | $ | (417.3 | ) | $ | (180.6 | ) | |||||||||
Less: Income (loss) from discontinued operations, net of taxes | — | 0.5 | 6.6 | (0.8 | ) | (91.5 | ) | (51.7 | ) | ||||||||||||||||
Income (loss) from continuing operations | 31.1 | (2.5 | ) | 834.5 | (68.9 | ) | (325.8 | ) | (128.8 | ) | |||||||||||||||
Adjustments: | |||||||||||||||||||||||||
Depreciation and amortization associated with continuing operations | 15.5 | 11.2 | 37.7 | 10.4 | 63.8 | 152.2 | |||||||||||||||||||
Interest expense, net | 2.0 | 1.3 | 31.2 | 14.7 | 76.1 | 60.3 | |||||||||||||||||||
Income tax expenses (benefits) | (1.0 | ) | 1.9 | 7.3 | 2.6 | 11.6 | 8.8 | ||||||||||||||||||
Restructuring and impairment charges(a) | 0.3 | — | 0.4 | 0.1 | 13.4 | 12.1 | |||||||||||||||||||
Other restructuring charges(b) | — | — | 13.3 | 3.1 | 6.2 | — | |||||||||||||||||||
Abandoned IPO expenses(c) | — | — | — | — | 3.7 | — | |||||||||||||||||||
Subcontractor claim settlement(d) | — | — | — | — | — | 1.3 | |||||||||||||||||||
Reorganization items, net(e) | — | — | (804.6 | ) | — | — | — | ||||||||||||||||||
Inventorystep-up(f) | 0.9 | 17.2 | — | — | — | — | |||||||||||||||||||
Equity based compensation expense(g) | 1.5 | 2.2 | 0.2 | 0.1 | 0.5 | 0.6 | |||||||||||||||||||
Foreign currency loss (gain), net(h) | (21.6 | ) | (9.3 | ) | (43.4 | ) | 40.2 | 210.4 | 4.7 | ||||||||||||||||
Adjusted EBITDA | $ | 28.7 | $ | 22.1 | $ | 76.6 | $ | 2.3 | $ | 59.8 | $ | 111.2 | |||||||||||||
(a) | This adjustment is comprised of all items included in the restructuring and impairment charges line item on our consolidated statements of operations, and eliminates the impact of restructuring and impairment charges related to (i) for the three months ended March 31, 2010, impairment of two abandoned in-process research and development projects, accounted for as indefinite-lived intangible assets as part of the application of fresh-start accounting, (ii) for the three months ended March 29, 2009, the closure of our research and development facilities in Japan, (iii) for 2009, termination benefits and other related costs, for the ten-month period ended October 25, 2009 in connection with the closure of one of our research and development facilities in Japan, (iv) for 2008, goodwill impairment triggered by the significant adverse change in the revenue of our mobile display solutions, or MDS reporting unit, and a reversal of a portion of the restructuring accrual related to the closure of our Gumi five-inch wafer fabrication facilities in 2007, and (v) for 2007, the closure of our Gumi five-inch wafer fabrication facilities. We do not believe these restructuring and impairment charges are indicative of our core ongoing operating performance because we do not anticipate similar facility closures and market driven events in our ongoing operations, although we cannot guarantee that similar events will not occur in the future. | |
(b) | This adjustment relates to certain restructuring charges that are not included in the restructuring and impairment charges line item on our consolidated statements of operations. These items are included in selling, general and administrative expenses in our consolidated statements of operations. These charges are comprised of the following: (i) for the three months ended March 29, 2009, a charge of $3.1 million for restructuring-related professional fees and related expenses, (ii) for 2009, a charge of $13.3 million for restructuring-related professional fees and related expenses, and (iii) for 2008, a charge of $6.2 million for restructuring-related professional fees and related expenses. We do not believe these other |
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restructuring charges are indicative of our core ongoing operating performance because these charges were related, in significant part, to actions we took in response to the impacts on our business resulting from the global economic recession that persisted through 2008 and 2009. We cannot guarantee that similar charges will not be incurred in the future. |
(c) | This adjustment eliminates a $3.7 million charge in 2008 related to expenses incurred in connection with our abandoned initial public offering in 2008. We do not believe that these charges are indicative of our core operating performance. We have incurred similar costs in connection with the MagnaChip Corporation IPO. | |
(d) | This adjustment eliminates a $1.3 million charge attributable to a one-time settlement of claims with a subcontractor. We no longer obtain services from this subcontractor and do not expect to incur similar charges in the future. | |
(e) | This adjustment eliminates the impact of largely non-cash reorganization income and expense items directly associated with our reorganization proceedings from our ongoing operations including, among others, professional fees, the revaluation of assets, the effects of the Chapter 11 reorganization plan and fresh-start accounting principles and the write-off of debt issuance costs. Included in reorganization items, net for the ten-month period ended October 25, 2009 was our predecessor’s gain recognized from the effects of our reorganization proceedings. The gain results from the difference between our predecessor’s carrying value of remaining pre-petition liabilities subject to compromise and the amounts to be distributed pursuant to the reorganization proceedings. The gain from the effects of the reorganization proceedings and the application of fresh-start accounting principles is comprised of the discharge of liabilities subject to compromise, net of the issuance of new common units and new warrants and the accrual of amounts to be settled in cash. For details regarding this adjustment, see note 5 to the consolidated financial statements of MagnaChip Semiconductor LLC for the ten-month period ended October 25, 2009 and the two-month period ended December 31, 2009 included elsewhere in this prospectus. We do not believe these items are indicative of our core ongoing operating performance because they were incurred as a result of our Chapter 11 reorganization. | |
(f) | This adjustment eliminates the one-time impact on cost of sales associated with thewrite-up of our inventory in accordance with the principles of fresh-start accounting upon consummation of the Chapter 11 reorganization. | |
(g) | This adjustment eliminates the impact of non-cash equity-based compensation expenses. Although we expect to incur non-cash equity-based compensation expenses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these non-cash expenses, as supplemental information. | |
(h) | This adjustment eliminates the impact of non-cash foreign currency translation associated with intercompany debt obligations and foreign currency denominated receivables and payables, as well as the cash impact of foreign currency transaction gains or losses on collection of such receivables and payment of such payables. Although we expect to incur foreign currency translation gains or losses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these primarily non-cash gains or losses, as supplemental information. |
• | Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; |
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• | Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; | |
• | Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; | |
• | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; | |
• | Adjusted EBITDA does not consider the potentially dilutive impact of issuing equity-based compensation to our management team and employees; | |
• | Adjusted EBITDA does not reflect the costs of holding certain assets and liabilities in foreign currencies; and | |
• | other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
(5) | We present Adjusted Net Income as a further supplemental measure of our performance. We prepare Adjusted Net Income by adjusting net income (loss) to eliminate the impact of a number of non-cash expenses and other items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance. We believe that Adjusted Net Income is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. |
• | we use Adjusted Net Income in communications with our board of directors concerning our consolidated financial performance; | |
• | we believe that Adjusted Net Income is an enterprise level performance measure commonly reported and widely used by analysts and investors in our industry; and | |
• | we anticipate that our investor and analyst presentations when and if we are public will include Adjusted Net Income. |
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Historical | |||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||
Three Months | Two-Month | Ten-Month | Three Months | ||||||||||||||||||||||
Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||
March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Net income (loss) | $ | 31.1 | $ | (2.0 | ) | $ | 841.1 | $ | (69.7 | ) | $ | (417.3 | ) | $ | (180.6 | ) | |||||||||
Less: Income (loss) from discontinued operations, net of taxes | — | 0.5 | 6.6 | (0.8 | ) | (91.5 | ) | (51.7 | ) | ||||||||||||||||
Income (loss) from continuing operations | 31.1 | (2.5 | ) | 834.5 | (68.9 | ) | (325.8 | ) | (128.8 | ) | |||||||||||||||
Adjustments: | |||||||||||||||||||||||||
Restructuring and impairment charges(a) | 0.3 | — | 0.4 | 0.1 | 13.4 | 12.1 | |||||||||||||||||||
Other restructuring charges(b) | — | — | 13.3 | 3.1 | 6.2 | — | |||||||||||||||||||
Abandoned IPO expenses(c) | — | — | — | — | 3.7 | — | |||||||||||||||||||
Subcontractor claim settlement(d) | — | — | — | — | — | 1.3 | |||||||||||||||||||
Reorganization items, net(e) | — | — | (804.6 | ) | — | — | — | ||||||||||||||||||
Inventorystep-up(f) | 0.9 | 17.2 | — | — | — | — | |||||||||||||||||||
Equity based compensation expense(g) | 1.5 | 2.2 | 0.2 | 0.1 | 0.5 | 0.6 | |||||||||||||||||||
Amortization of intangibles associated with continuing operations(h) | 7.7 | 5.6 | 8.8 | 2.4 | 20.0 | 27.5 | |||||||||||||||||||
Foreign currency loss (gain), net(i) | (21.6 | ) | (9.3 | ) | (43.4 | ) | 40.2 | 210.4 | 4.7 | ||||||||||||||||
Adjusted Net Income (Loss) | $ | 19.9 | $ | 13.3 | $ | 9.3 | $ | (22.9 | ) | $ | (71.7 | ) | $ | (82.6 | ) | ||||||||||
(a) | This adjustment is comprised of all items included in the restructuring and impairment charges line item on our consolidated statements of operations, and eliminates the impact of restructuring and impairment charges related to (i) for the three months ended March 31, 2010, impairment of two abandoned in-process research and development projects, accounted for as indefinite-lived intangible assets as part of the application of fresh-start accounting, (ii) for the three months ended March 29, 2009, the closure of our research and development facilities in Japan, (iii) for 2009, termination benefits and other related costs, for the ten-month period ended October 25, 2009 in connection with the closure of one of our research and development facilities in Japan, (iv) for 2008, goodwill impairment triggered by the significant adverse change in the revenue of our MDS reporting unit and a reversal of a portion of the restructuring accrual related to the closure of our Gumi five-inch wafer fabrication facilities in 2007, and (v) for 2007, the closure of our Gumi five-inch wafer fabrication facilities. We do not believe these restructuring and impairment charges are indicative of our core ongoing operating performance because we do not anticipate similar facility closures and market driven events in our ongoing operations, although we cannot guarantee that similar events will not occur in the future. |
(b) | This adjustment relates to certain restructuring charges that are not included in the restructuring and impairment charges line item on our consolidated statements of operations. These items are included in selling, general and administrative expenses in our consolidated statements of operations. These charges are comprised of the following: (i) for the three months ended March 29, 2009, a charge of $3.1 million for restructuring-related professional fees and related expenses, (ii) for 2009, a charge of $13.3 million for restructuring-related professional fees and related expenses, and (iii) for 2008, a charge of $6.2 million for restructuring-related professional fees and related expenses. We do not believe these other restructuring charges are indicative of our core ongoing operating performance because these charges were related, in significant part, to actions we took in response to the impacts on our business resulting from the global economic recession that persisted through 2008 and 2009. We cannot guarantee that similar charges will not be incurred in the future. |
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(c) | This adjustment eliminates a $3.7 million charge in 2008 related to expenses incurred in connection with our abandoned initial public offering in 2008. We do not believe that these charges are indicative of our core operating performance. We have incurred similar costs in connection with the MagnaChip Corporation IPO. | |
(d) | This adjustment eliminates a $1.3 million charge attributable to a one-time settlement of claims with a subcontractor. We no longer obtain services from this subcontractor and do not expect to incur similar charges in the future. | |
(e) | This adjustment eliminates the impact of largely non-cash reorganization income and expense items directly associated with our reorganization proceedings from our ongoing operations including, among others, professional fees, the revaluation of assets, the effects of the Chapter 11 reorganization plan and fresh-start accounting principles and the write-off of debt issuance costs. Included in reorganization items, net for the ten-month period ended October 25, 2009 was our predecessor’s gain recognized from the effects of our reorganization proceedings. The gain results from the difference between our predecessor’s carrying value of remaining pre-petition liabilities subject to compromise and the amounts to be distributed pursuant to the reorganization proceedings. The gain from the effects of the reorganization proceedings and the application of fresh-start accounting principles is comprised of the discharge of liabilities subject to compromise, net of the issuance of new common units and new warrants and the accrual of amounts to be settled in cash. For details regarding this adjustment, see note 5 to the consolidated financial statements of MagnaChip Semiconductor LLC for the ten-month period ended October 25, 2009 and the two-month period ended December 31, 2009 included elsewhere in this prospectus. We do not believe these items are indicative of our core ongoing operating performance because they were incurred as a result of our reorganization proceedings. | |
(f) | This adjustment eliminates the one-time impact on cost of sales associated with thewrite-up of our inventory in accordance with the principles of fresh-start accounting upon consummation of the Chapter 11 reorganization. | |
(g) | This adjustment eliminates the impact of non-cash equity-based compensation expenses. Although we expect to incur non-cash equity-based compensation expenses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these non-cash expenses, as supplemental information. | |
(h) | This adjustment eliminates the non-cash impact of amortization expense for intangible assets created as a result of the purchase accounting treatment of the Original Acquisition and other subsequent acquisitions, and from the application of fresh-start accounting in connection with the reorganization proceedings. We do not believe these non-cash amortization expenses for intangibles are indicative of our core ongoing operating performance because the assets would not have been capitalized on our balance sheet but for the application of purchase accounting or fresh-start accounting, as applicable. | |
(i) | This adjustment eliminates the impact of non-cash foreign currency translation associated with intercompany debt obligations and foreign currency denominated receivables and payables, as well as the cash impact of foreign currency transaction gains or losses on collection of such receivables and payment of such payables. Although we expect to incur foreign currency translation gains or losses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these primarily non-cash gains or losses, as supplemental information. |
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• | Adjusted Net Income does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; | |
• | Adjusted Net Income does not reflect changes in, or cash requirements for, our working capital needs; | |
• | Adjusted Net Income does not consider the potentially dilutive impact of issuing equity-based compensation to our management team and employees; | |
• | Adjusted Net Income does not reflect the costs of holding certain assets and liabilities in foreign currencies; and | |
• | other companies in our industry may calculate Adjusted Net Income differently than we do, limiting its usefulness as a comparative measure. |
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• | the reorganization proceedings and adoption of fresh-start reporting; and | |
• | the issuance of $250 million old notes by MagnaChip Semiconductor S.A. and MagnaChip Semiconductor Finance Company, our wholly-owned subsidiaries, and the application of the net proceeds therefrom. |
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Successor | ||||
October 25, | ||||
2009 | ||||
Assets: | ||||
Cash and cash equivalents | $ | 67.6 | ||
Inventories | 69.3 | |||
Other current assets | 110.5 | |||
Property plant and equipment | 158.4 | |||
Intangible assets | 55.2 | |||
Other non-current assets | 24.5 | |||
Total Assets | 485.5 | |||
Liabilities: | ||||
Current portion long term debt | 0.5 | |||
Other current liabilities | 123.9 | |||
Long-term debt | 61.3 | |||
Other non-current liabilities | 81.5 | |||
Total liabilities | 267.2 | |||
Net Assets acquired | $ | 218.4 | ||
Estimated | ||||||||
Intangible Assets | Fair Value | Useful lives | ||||||
Technology | $ | 14.7 | 1-5 | |||||
Customer relationships | 26.1 | 0.5-5 | ||||||
Intellectual property assets | 4.7 | 4 | ||||||
In-process research and development | 9.7 | |||||||
Total Intangible Assets | $ | 55.2 | ||||||
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Historical | Pro Forma | |||||||||||
Three Months | Three Months | |||||||||||
Ended | Ended | |||||||||||
March 31, | March 31, | |||||||||||
2010 | Adjustments | 2010 | ||||||||||
(In millions, except per common unit data) | ||||||||||||
Condensed Pro Forma Statement of Operations: | ||||||||||||
Net sales | $ | 179.5 | $ | — | $ | 179.5 | ||||||
Cost of sales | 130.1 | (0.9 | )(1) | 129.3 | ||||||||
Gross profit | 49.4 | 50.2 | ||||||||||
Selling, general and administrative Expenses | 17.9 | — | 17.9 | |||||||||
Research and development expenses | 20.5 | — | 20.5 | |||||||||
Restructuring and impairment charges | 0.3 | — | 0.3 | |||||||||
Operating income from continuing Operations | 10.6 | 11.5 | ||||||||||
Interest expense, net | (2.0 | ) | (4.9 | )(2) | (6.9 | ) | ||||||
Foreign currency gain, net | 21.6 | — | 21.6 | |||||||||
Others | (0.1 | ) | — | (0.1 | ) | |||||||
19.5 | 14.7 | |||||||||||
Income from continuing operations before income taxes | 30.1 | 26.1 | ||||||||||
Income tax benefits | (1.0 | ) | — | (3) | (1.0 | ) | ||||||
Income from continuing operations | $ | 31.1 | $ | 27.1 | ||||||||
Per common unit data: | ||||||||||||
Earnings from continuing operations per common unit — Basic and diluted | $ | 0.10 | $ | 0.09 | ||||||||
Weighted average number of common units — | ||||||||||||
Basic | 302.444 | 302.444 | ||||||||||
Diluted | 307.536 | 307.536 |
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Historical | Pro Forma | |||||||||||
As of | As of | |||||||||||
March 31, | March 31, | |||||||||||
2010 | Adjustments | 2010 | ||||||||||
(In millions, except common unit data) | ||||||||||||
Condensed Pro Forma Balance Sheet: | ||||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 82.7 | $ | 46.1 | (4) | $ | 128.8 | |||||
Accounts receivables, net | 104.5 | — | 104.5 | |||||||||
Inventories, net | 58.2 | — | 58.2 | |||||||||
Other | 25.3 | (0.0 | )(5) | 25.3 | ||||||||
Total current assets | 270.7 | 316.8 | ||||||||||
Property, plant and equipment, net | 154.7 | — | 154.7 | |||||||||
Intangible assets, net | 43.5 | — | 43.5 | |||||||||
Other non-current assets | 23.1 | 8.1 | (5) | 31.2 | ||||||||
Total assets | $ | 492.0 | $ | 546.2 | ||||||||
Liabilities and Unitholders’ Equity | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 77.9 | — | $ | 77.9 | |||||||
Other accounts payable | 7.6 | — | 7.6 | |||||||||
Accrued expenses | 25.3 | — | 25.3 | |||||||||
Current portion of long-term debt | 0.6 | (0.6 | )(6) | — | ||||||||
Other current liabilities | 4.6 | — | 4.6 | |||||||||
Total current liabilities | 115.9 | 115.2 | ||||||||||
Long-term borrowings | 61.0 | (61.0 | )(6) | |||||||||
246.7 | (6) | 246.7 | ||||||||||
Accrued severance benefits, net | 76.8 | 76.8 | ||||||||||
Other non-current liabilities | 6.9 | — | 6.9 | |||||||||
Total liabilities | 260.6 | 445.7 | ||||||||||
Commitments and contingencies | ||||||||||||
Unitholders’ equity | ||||||||||||
Common units; 375,000,000 units authorized, 307,233,996 units issued and outstanding at March 31, 2010 | 55.5 | 55.5 | ||||||||||
Additional paid-in capital | 169.3 | (130.7 | )(6) | 38.6 | ||||||||
Retained earnings | 29.1 | (0.2 | )(5) | 28.9 | ||||||||
Accumulated other comprehensive (loss) | (22.4 | ) | — | (22.4 | ) | |||||||
Total unitholders’ equity | 231.4 | 100.5 | ||||||||||
Total liabilities and unitholders’ | ||||||||||||
Equity | $ | 492.0 | $ | 546.2 | ||||||||
(1) | To eliminate the $0.9 million one-time impact on cost of sales associated with the step up of our inventory resulting from implementation of fresh-start accounting in 2009 which was charged to cost of sales in the historical statement of operations for the three months ended March 31, 2010. The pro forma financial statements assume the transaction occurred as of January 1, 2009 and as such this amount is being eliminated from the historical statement of operations in presenting the |
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unaudited pro forma statement of operations, as for pro forma purposes, this charge would not have occurred in the three months ended March 31, 2010. | ||
(2) | To eliminate interest expense of $2.0 million which was incurred on our $61.6 million aggregate principal amount new term loan which was recognized in the three months ended March 31, 2010. In addition, the pro forma adjustment assumes the 10.500% old notes in the aggregate principal amount of $250.0 million, issued on April 9, 2010, were outstanding as of January 1, 2009. The resulting additional interest expense from our 10.500% old notes would have been $6.8 million using the effective interest rate method. | |
(3) | We believe that the pro forma adjustments related to the issuance of $250 million aggregate principal amount of old notes and the application of the net proceeds should not have an impact on income tax expense for the three months ended March 31, 2010. The pro forma adjustment resulting in an increase in interest expense, net is primarily related to our foreign subsidiaries that have sufficient amounts of operating loss carry forwards and, accordingly, such pro forma adjustment will have no income tax impact. | |
(4) | To reflect a $46.1 million increase in cash and cash equivalents which represents the portion of the net proceeds from the issuance of $250 million aggregate principal amount of old notes that was applied to fund working capital and for general corporate purposes. | |
(5) | To reflect $8.3 million of debt issuance costs in connection with the offering of $250 million aggregate principal amount of old notes and $0.2 million elimination of existing debt issuance costs regarding the repayment of our new term loan. | |
(6) | To reflect the issuance of $250.0 million aggregate principal amount of old notes with $3.3 million of original issue discount and application of $130.7 million of net proceeds to make a distribution to unitholders and resulting decrease in additional paid in capital and application of $61.6 million of net proceeds to repay our new term loan of $61.6 million of which $0.6 million was classified as short-term as of March 31, 2010. |
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Historical | ||||||||||||||||
Successor | Predecessor | |||||||||||||||
Two-Month | Ten-Month | |||||||||||||||
Period | Period | Pro Forma | ||||||||||||||
Ended | Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | ||||||||||||||
2009 | 2009 | Adjustments | 2009 | |||||||||||||
(In millions, except per common unit data) | ||||||||||||||||
Condensed Pro Forma Statement of Operations: | ||||||||||||||||
Net sales | $ | 111.1 | $ | 449.0 | $ | — | $ | 560.1 | ||||||||
Cost of sales | 90.4 | 311.1 | (5.4 | )(1) | ||||||||||||
(17.2 | )(2) | 378.9 | ||||||||||||||
Gross profit | 20.7 | 137.8 | 181.2 | |||||||||||||
Selling, general and administrative expenses | 14.5 | 56.3 | 0.8 | (1) | 71.6 | |||||||||||
Research and development expenses | 14.7 | 56.1 | 6.4 | (1) | 77.3 | |||||||||||
Restructuring and impairment charges | — | 0.4 | — | 0.4 | ||||||||||||
Operating income (loss) from continuing operations | (8.6 | ) | 25.0 | 31.9 | ||||||||||||
Interest expense, net | (1.3 | ) | (31.2 | ) | 3.6 | (3) | (28.8 | ) | ||||||||
Foreign currency gain, net | 9.3 | 43.4 | — | 52.8 | ||||||||||||
Reorganization items, net | — | 804.6 | (804.6 | )(4) | — | |||||||||||
8.1 | 816.8 | 24.0 | ||||||||||||||
Income (loss) from continuing operations before income taxes | (0.5 | ) | 841.8 | — | 55.9 | |||||||||||
Income tax expenses | 1.9 | 7.3 | — | (5) | 9.2 | |||||||||||
Income (loss) from continuing operations | $ | (2.5 | ) | $ | 834.5 | $ | 46.6 | |||||||||
Dividends accrued on preferred unit | — | 6.3 | (6.3 | )(6) | — | |||||||||||
Income (loss) from continuing operations attributable to common unit | $ | (2.5 | ) | $ | 828.2 | $ | $ | 46.6 | ||||||||
Per common unit data:(7) | ||||||||||||||||
Earnings (loss) from continuing operations per common unit — Basic and diluted | $ | (0.01 | ) | $ | 15.65 | $ | 0.16 | |||||||||
Weighted average number of common units | ||||||||||||||||
Basic | 300.863 | 52.923 | 300.158 | |||||||||||||
Diluted | 300.863 | 52.923 | 300.166 |
(1) | To reflect the net change in historical cost of sales and selling, general and administrative expenses and research and development expenses of the predecessor company due to the application of fresh-start accounting as of January 1, 2009 which resulted in a reduction of $13.9 million of tangible assets and an increase of $28.3 million in intangible assets. The corresponding change in depreciation and amortization would have been a decrease in depreciation expense for tangible assets by $7.4 million for the ten-month period ended October 25, 2009 and an increase in amortization expense for intangible assets by $9.1 million for the same period. The useful lives were determined for each tangible asset, which are depreciated on a straight-line basis and range from two to 35 years with a weighted average useful life of 14 years. Technology and customer relationships are amortized on a straight-line basis over one-half to five years based on expected benefit periods. Patents, trademarks and property use rights |
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are amortized on a straight-line basis over the periods of benefits for four years. The estimated useful life of tangibles and intangibles were determined based on expected benefitsand/or economic availability for service periods. The aggregate depreciation and amortization expense was allocated to cost of sales and selling, general and administrative expenses and research and development expenses by ($5.4) million, $0.8 million, and $6.4 million, respectively, in respect of the purpose of property, plant and equipment and intangible assets. |
Amortization | Depreciation | Total | ||||||||||
(In millions) | ||||||||||||
Cost of sales | $ | — | $ | (5.4 | ) | $ | (5.4 | ) | ||||
Selling, general and administrative Expenses | 1.3 | (0.5 | ) | 0.8 | ||||||||
Research and development expenses | 7.9 | (1.4 | ) | 6.4 | ||||||||
$ | 9.1 | $ | (7.4 | ) | $ | 1.8 | ||||||
(2) | To eliminate the one-time impact on cost of sales associated with the step up of our inventory of $17.9 million, of which $17.2 million was charged to cost of sales in the historical statement of operations for the two-month period ended December 31, 2009, applying the first in, first out method, or FIFO. This adjustment is considered a material non-recurring charge which is directly attributable to the reorganization proceedings and fresh-start accounting and as such is being eliminated from the historical statement of operations in presenting the unaudited pro forma statement of operations. | |
(3) | To eliminate interest expense of $30.8 million of which $29.6 million was incurred on our indebtedness outstanding prior to our reorganization proceedings which was recognized in the ten-month period ended October 25, 2009 and $1.2 million was incurred on our new term loan which was recognized in the two-month period ended December 31, 2009. The $29.6 million incurred on our indebtedness outstanding prior to our reorganization proceedings was comprised of $21.6 million incurred on notes of $750.0 million and $8.0 million incurred under the senior secured credit facility of $95.0 million which was recognized in the ten-month period ended October 25, 2009. In addition, the pro forma adjustment assumes the 10.500% senior notes in the aggregate principal amount of $250.0 million, issued on April 9, 2010, were outstanding as of January 1, 2009. The resulting additional interest expense from our 10.500% senior notes would have been $27.2 million using the effective interest rate method. | |
(4) | To reflect the elimination of the impact of the reorganization items, net recorded in the predecessor period in accordance with ASC 852 upon emergence from the reorganization proceedings, assumed to have occurred January 1, 2009 for the unaudited pro forma statement of operations. As such no adjustment for reorganization items should be reflected. | |
(5) | We believe that the pro forma adjustments related to the reorganization proceedings and adoption of fresh-start reporting and the issuance of $250 million aggregate principal amount of old notes and the application of the net proceeds should not have an impact on income tax expense for 2009. Those pro forma adjustments which would have income tax impacts, such as increase or decrease in depreciation and amortization expenses and decrease in interest expenses, net are primarily related to our foreign subsidiaries that have sufficient amounts of operating loss carry forwards and, accordingly, such pro forma adjustments will have no income tax impact. | |
(6) | To eliminate dividends accrued on preferred units, cancelled in connection with our emergence from reorganization proceedings, in the amount of $6.3 million as of October 25, 2009. | |
(7) | Basic and diluted pro forma income per common unit from continuing operations reflects the impact from the implementation of our plan of reorganization which represents the cancellation of our old common units and issuance of new common units. The following table sets forth the |
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computation of unaudited pro forma basic and diluted income per common unit from continuing operations: |
Earnings per | ||||||||
Common | ||||||||
Weighted | Unit from | |||||||
Average | Continuing | |||||||
Common Units | Operations | |||||||
Historical ten-month period ended October 25, 2009 | 52,923,483 | $ | 15.65 | |||||
Historical two-month period ended December 31, 2009 | 300,862,764 | (0.01 | ) | |||||
Pro forma adjustment for the ten-month period ended October 25, 2009 in conjunction with the implementation of the Plan of Reorganization | ||||||||
Basic | (53,627,880 | ) | ||||||
Diluted | (53,620,300 | ) | ||||||
Pro forma for the combined twelve-month period ended December 31, 2009 | ||||||||
Basic | 300,158,367 | $ | 0.16 | |||||
Diluted | 300,165,947 | $ | 0.16 | |||||
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AND RESULTS OF OPERATIONS
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• | Display Solutions: Our Display Solutions products include source and gate drivers and timing controllers that cover a wide range of flat panel displays used in LCD televisions and LED televisions and displays, mobile PCs and mobile communications and entertainment devices. Our display solutions support the industry’s most advanced display technologies, such as LTPS and AMOLED, as well as high-volume display technologies such as TFT. Our Display Solutions business represented 50.5%, 50.5% and 46.7% of our net sales for the fiscal years ended December 31, 2009 (on a combined basis), 2008 and 2007, respectively and 42.8% and 58.8% of our net sales for the three months ended March 31, 2010 and March 29, 2009, respectively. | |
• | Power Solutions: Our Power Solutions segment produces power management semiconductor products including discrete and integrated circuit solutions for power management in high-volume consumer applications. These products include MOSFETs, LED drivers, DC-DC converters, analog switches and linear regulators, such as low-dropout regulators, or LDOs. Our power solutions products are designed for applications such as mobile phones, LCD televisions, and desktop computers, and allow electronics manufacturers to achieve specific design goals of high efficiency and low standby power consumption. Going forward, we expect to continue to expand our power management product portfolio. Our Power Solutions business represented 2.2% and 0.9% of our net sales for the fiscal years ended December 31, 2009 (on a combined basis) and 2008, respectively and 5.0% and 0.9% of our net sales for three months ended March 31, 2010 and March 29, 2009, respectively. | |
• | Semiconductor Manufacturing Services: Our Semiconductor Manufacturing Services segment provides specialty analog and mixed-signal foundry services to fabless semiconductor companies that serve the consumer, computing and wireless end markets. We manufacture wafers based on our customers’ product designs. We do not market these products directly to end customers but rather supply manufactured wafers and products to our customers to market to their end customers. We offer approximately 200 process flows to our manufacturing services customers. We also often partner with key customers to jointly develop or customize specialized processes that enable our customers to improve their products and allow us to develop unique manufacturing expertise. Our manufacturing services are targeted at customers who require differentiated, specialty analog and mixed-signal process technologies such as high voltage CMOS, embedded memory and power. These customers typically serve high-growth and high-volume applications in the consumer, computing and wireless end markets. Our Semiconductor Manufacturing Services business represented 46.7%, 47.7% and 45.2% of our net sales for the fiscal years ended December 31, 2009 (on a combined basis), 2008 and 2007, respectively and 51.9% and 39.6% of our net sales for the three months ended March 31, 2010 and March 29, 2009, respectively. |
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• | Adjusted EBITDA eliminates the impact of a number of items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance; | |
• | we believe that Adjusted EBITDA is an enterprise level performance measure commonly reported and widely used by analysts and investors in our industry; | |
• | we anticipate that our investor and analyst presentations when and if we are public will include Adjusted EBITDA; and | |
• | we believe that Adjusted EBITDA provides investors with a more consistent measurement of period to period performance of our core operations, as well as a comparison of our operating performance to companies in our industry. |
• | for planning purposes, including the preparation of our annual operating budget; | |
• | to evaluate the effectiveness of our enterprise level business strategies; | |
• | in communications with our board of directors concerning our consolidated financial performance; and | |
• | in certain of our compensation plans as a performance measure for determining incentive compensation payments. |
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Period | Rate | |||
Year ended December 31, 2007 | 929:1 | |||
Year ended December 31, 2008 | 1,099:1 | |||
Ten-month period ended October 25, 2009 | 1,302:1 | |||
Two-month period ended December 31, 2009 | ||||
November 2009 | 1,172:1 | |||
December 2009 | 1,165:1 | |||
Three months ended March 29, 2009 | 1,417:1 | |||
Three months ended March 31, 2010 | ||||
January 2010 | 1,139:1 | |||
February 2010 | 1,157:1 | |||
March 2010 | 1,138:1 |
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Successor | |||||||||||||||||||||||||||||||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||||||||||||||||||||||||||||||
Three Months | Two-Month | Ten-Month | Three Months | ||||||||||||||||||||||||||||||||||||||||||||||
Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||||||||||||||||||||||||||
March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||
% of | % of | % of | % of | % of | % of | ||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net | Net | Net | Net | ||||||||||||||||||||||||||||||||||||||||||||
Amount | Sales | Amount | Sales | Amount | Sales | Amount | Sales | Amount | Sales | Amount | Sales | ||||||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated statements of operations data: | |||||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 179.5 | 100.0 | % | $ | 111.1 | 100.0 | % | $ | 449.0 | 100.0 | % | $ | 101.5 | 100.0 | % | $ | 601.7 | 100.0 | % | $ | 709.5 | 100.0 | % | |||||||||||||||||||||||||
Cost of sales | 130.1 | 72.5 | 90.4 | 81.4 | 311.1 | 69.3 | 80.6 | 79.4 | 445.3 | 74.0 | 578.9 | 81.6 | |||||||||||||||||||||||||||||||||||||
Gross profit | 49.4 | 27.5 | 20.7 | 18.6 | 137.8 | 30.7 | 20.9 | 20.6 | 156.4 | 26.0 | 130.7 | 18.4 | |||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 17.9 | 10.0 | 14.5 | 13.1 | 56.3 | 12.5 | 15.3 | 15.1 | 81.3 | 13.5 | 82.7 | 11.7 | |||||||||||||||||||||||||||||||||||||
Research and development expenses | 20.5 | 11.4 | 14.7 | 13.3 | 56.1 | 12.5 | 17.0 | 16.7 | 89.5 | 14.9 | 90.8 | 12.8 | |||||||||||||||||||||||||||||||||||||
Restructuring and impairment charges | 0.3 | 0.2 | — | — | 0.4 | 0.1 | 0.1 | 0.1 | 13.4 | 2.2 | 12.1 | 1.7 | |||||||||||||||||||||||||||||||||||||
Operating income (loss) from continuing operations | 10.6 | 5.9 | (8.6 | ) | (7.7 | ) | 25.0 | 5.6 | (11.4 | ) | (11.3 | ) | (27.7 | ) | (4.6 | ) | (54.9 | ) | (7.7 | ) | |||||||||||||||||||||||||||||
Interest expense, net | (2.0 | ) | (1.1 | ) | (1.3 | ) | (1.1 | ) | (31.2 | ) | (6.9 | ) | (14.7 | ) | (14.4 | ) | (76.1 | ) | (12.7 | ) | (60.3 | ) | (8.5 | ) | |||||||||||||||||||||||||
Foreign currency gain (loss), net | 21.6 | 12.0 | 9.3 | 8.4 | 43.4 | 9.7 | (40.2 | ) | (39.6 | ) | (210.4 | ) | (35.0 | ) | (4.7 | ) | (0.7 | ) | |||||||||||||||||||||||||||||||
Reorganization items, net | — | — | — | — | 804.6 | 179.2 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Others | (0.1 | ) | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
19.5 | 10.9 | 8.1 | 7.3 | 816.8 | 181.9 | (54.9 | ) | (54.1 | ) | (286.5 | ) | (47.6 | ) | (65.0 | ) | (9.2 | ) | ||||||||||||||||||||||||||||||||
Income (loss) continuing operations before income taxes | 30.1 | 16.8 | (0.5 | ) | (0.5 | ) | 841.8 | 187.5 | (66.3 | ) | (65.3 | ) | (314.3 | ) | (52.2 | ) | (120.0 | ) | (16.9 | ) | |||||||||||||||||||||||||||||
Income tax expenses (benefits) | (1.0 | ) | (0.6 | ) | 1.9 | 1.8 | 7.3 | 1.6 | 2.6 | 2.6 | 11.6 | 1.9 | 8.8 | 1.2 | |||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | 31.1 | 17.3 | (2.5 | ) | (2.2 | ) | 834.5 | 185.9 | (68.9 | ) | (67.9 | ) | (325.8 | ) | (54.2 | ) | (128.8 | ) | (18.2 | ) | |||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of taxes | — | — | 0.5 | 0.5 | 6.6 | 1.5 | (0.8 | ) | (0.8 | ) | (91.5 | ) | (15.2 | ) | (51.7 | ) | (7.3 | ) | |||||||||||||||||||||||||||||||
Net income (loss) | $ | 31.1 | 17.3 | % | $ | (2.0 | ) | (1.8 | )% | $ | 841.1 | 187.3 | % | $ | (69.7 | ) | (68.7 | )% | $ | (417.3 | ) | (69.4 | )% | $ | (180.6 | ) | (25.4 | )% | |||||||||||||||||||||
Net Sales: |
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Successor | |||||||||||||||||||||||||||||||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||||||||||||||||||||||||||||||
Three Months | Two-Month | Ten-Month | Three Months | ||||||||||||||||||||||||||||||||||||||||||||||
Ended | Period Ended | Period Ended | Ended | Years Ended | |||||||||||||||||||||||||||||||||||||||||||||
March 31, | December 31, | October 25, | March 29, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||
% of | % of | % of | % of | % of | % of | ||||||||||||||||||||||||||||||||||||||||||||
Net | Net | Net | Net | Net | Net | ||||||||||||||||||||||||||||||||||||||||||||
Amount | Sales | Amount | Sales | Amount | Sales | Amount | Sales | Amount | Sales | Amount | Sales | ||||||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||||||||||
Display Solutions | $ | 76.7 | 42.8 | % | $ | 51.0 | 46.0 | % | $ | 231.9 | 51.6 | % | $ | 59.6 | 58.8 | % | $ | 304.1 | 50.5 | % | $ | 331.7 | 46.7 | % | |||||||||||||||||||||||||
Power Solutions | 9.0 | 5.0 | 4.7 | 4.3 | 7.6 | 1.7 | 0.9 | 0.9 | 5.4 | 0.9 | — | — | |||||||||||||||||||||||||||||||||||||
Semiconductor Manufacturing Services | 93.2 | 51.9 | 54.8 | 49.3 | 206.7 | 46.0 | 40.1 | 39.6 | 287.1 | 47.7 | 321.0 | 45.2 | |||||||||||||||||||||||||||||||||||||
All other | 0.5 | 0.3 | 0.5 | 0.5 | 2.8 | 0.6 | 0.8 | 0.8 | 5.0 | 0.8 | 56.8 | 8.0 | |||||||||||||||||||||||||||||||||||||
$ | 179.5 | 100.0 | % | $ | 111.1 | 100.0 | % | $ | 449.0 | 100.0 | % | $ | 101.5 | 100.0 | % | $ | 601.7 | 100.0 | % | $ | 709.5 | 100.0 | % | ||||||||||||||||||||||||||
Successor | |||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||
Three Months | Three Months | ||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||
March 31, | March 29, | ||||||||||||||||||||
2010 | 2009 | ||||||||||||||||||||
% of | % of | Change | |||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Net sales | $ | 179.5 | 100.0 | % | $ | 101.5 | 100.0 | % | $ | 78.0 | |||||||||||
Cost of sales | 130.1 | 72.5 | 80.6 | 79.4 | 49.6 | ||||||||||||||||
Gross profit | 49.4 | 27.5 | 20.9 | 20.6 | 28.5 | ||||||||||||||||
Selling, general and administrative expenses | 17.9 | 10.0 | 15.3 | 15.1 | 2.6 | ||||||||||||||||
Research and development expenses | 20.5 | 11.4 | 17.0 | 16.7 | 3.5 | ||||||||||||||||
Restructuring and impairment charges | 0.3 | 0.2 | 0.1 | 0.1 | 0.3 | ||||||||||||||||
Operating income (loss) from continuing operations | 10.6 | 5.9 | (11.4 | ) | (11.3 | ) | 22.0 | ||||||||||||||
Interest expense, net | (2.0 | ) | (1.1 | ) | (14.7 | ) | (14.4 | ) | 12.6 | ||||||||||||
Foreign currency gain (loss), net | 21.6 | 12.0 | (40.2 | ) | (39.6 | ) | 61.8 | ||||||||||||||
Reorganization items, net | — | — | — | — | — | ||||||||||||||||
Others | (0.1 | ) | — | — | — | (0.1 | ) | ||||||||||||||
19.5 | 10.9 | (54.9 | ) | (54.1 | ) | 74.4 | |||||||||||||||
Income (loss) continuing operations before income taxes | 30.1 | 16.8 | (66.3 | ) | (65.3 | ) | 96.4 | ||||||||||||||
Income tax expenses (benefits) | (1.0 | ) | (0.6 | ) | 2.6 | 2.6 | (3.6 | ) | |||||||||||||
Income (loss) from continuing operations | 31.1 | 17.3 | (68.9 | ) | (67.9 | ) | 100.0 | ||||||||||||||
Income (loss) from discontinued operations, net of taxes | — | — | (0.8 | ) | (0.8 | ) | 0.8 | ||||||||||||||
Net income (loss) | $ | 31.1 | 17.3 | % | $ | (69.7 | ) | (68.7 | )% | $ | 100.8 | ||||||||||
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Successor | |||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||
Three Months | Three Months | ||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||
March 31, | March 29, | ||||||||||||||||||||
2010 | 2009 | ||||||||||||||||||||
% of | % of | Change | |||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Display Solutions | $ | 76.7 | 42.8 | % | $ | 59.6 | 58.8 | % | $ | 17.1 | |||||||||||
Power Solutions | 9.0 | 5.0 | 0.9 | 0.9 | 8.1 | ||||||||||||||||
Semiconductor Manufacturing Services | 93.2 | 51.9 | 40.1 | 39.6 | 53.1 | ||||||||||||||||
All other | 0.5 | 0.3 | 0.8 | 0.8 | (0.2 | ) | |||||||||||||||
$ | 179.5 | 100.0 | % | $ | 101.5 | 100.0 | % | $ | 78.0 | ||||||||||||
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Successor | |||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||
Three Months | Three Months | ||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||
March 31, | March 29, | ||||||||||||||||||||
2010 | 2009 | ||||||||||||||||||||
% of | % of | Change | |||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Korea | $ | 97.7 | 54.4 | % | $ | 59.7 | 58.8 | % | $ | 38.0 | |||||||||||
Asia Pacific | 48.5 | 27.0 | 21.8 | 21.4 | 26.7 | ||||||||||||||||
Japan | 10.2 | 5.7 | 7.5 | 7.4 | 2.7 | ||||||||||||||||
North America | 20.4 | 11.4 | 8.6 | 8.5 | 11.8 | ||||||||||||||||
Europe | 2.8 | 1.5 | 3.9 | 3.8 | (1.1 | ) | |||||||||||||||
$ | 179.5 | 100.0 | % | $ | 101.5 | 100.0 | % | $ | 78.0 | ||||||||||||
Successor | |||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||
Three Months | Three Months | ||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||
March 31, | March 29, | ||||||||||||||||||||
2010 | 2009 | ||||||||||||||||||||
% of | % of | Change | |||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Display Solutions | $ | 14.4 | 18.8 | % | $ | 13.7 | 22.9 | % | $ | 0.8 | |||||||||||
Power Solutions | 1.6 | 17.3 | 0.3 | 29.9 | 1.3 | ||||||||||||||||
Semiconductor Manufacturing Services | 32.8 | 35.2 | 6.2 | 15.4 | 26.7 | ||||||||||||||||
All other | 0.5 | 100.0 | 0.8 | 100.0 | (0.2 | ) | |||||||||||||||
$ | 49.4 | 27.5 | % | $ | 20.9 | 20.6 | % | $ | 28.5 | ||||||||||||
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Successor | |||||||||||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||||||||||||||
Period | Period | Year | |||||||||||||||||||||||||||
Ended | Ended | Ended | |||||||||||||||||||||||||||
December 31, | October 25, | December 31, | |||||||||||||||||||||||||||
2009 | 2009 | 2008 | |||||||||||||||||||||||||||
% of | % of | % of | Change | ||||||||||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | Net Sales | Amount | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Net sales | $ | 111.1 | 100.0 | % | $ | 449.0 | 100.0 | % | $ | 601.7 | 100.0 | % | $ | (41.6 | ) | ||||||||||||||
Cost of sales | 90.4 | 81.4 | 311.1 | 69.3 | 445.3 | 74.0 | (43.7 | ) | |||||||||||||||||||||
Gross profit | 20.7 | 18.6 | 137.8 | 30.7 | 156.4 | 26.0 | 2.1 | ||||||||||||||||||||||
Selling, general and administrative expenses | 14.5 | 13.1 | 56.3 | 12.5 | 81.3 | 13.5 | (10.5 | ) | |||||||||||||||||||||
Research and development expenses | 14.7 | 13.3 | 56.1 | 12.5 | 89.5 | 14.9 | (18.6 | ) | |||||||||||||||||||||
Restructuring and impairment charges | — | — | 0.4 | 0.1 | 13.4 | 2.2 | (12.9 | ) | |||||||||||||||||||||
Operating income (loss) from continuing operations | (8.6 | ) | (7.7 | ) | 25.0 | 5.6 | (27.7 | ) | (4.6 | ) | 44.1 | ||||||||||||||||||
Interest expense, net | (1.3 | ) | (1.1 | ) | (31.2 | ) | (6.9 | ) | (76.1 | ) | (12.7 | ) | 43.7 | ||||||||||||||||
Foreign currency gain (loss), net | 9.3 | 8.4 | 43.4 | 9.7 | (210.4 | ) | (35.0 | ) | 263.2 | ||||||||||||||||||||
Reorganization items, net | — | — | 804.6 | 179.2 | — | — | 804.6 | ||||||||||||||||||||||
8.1 | 7.3 | 816.8 | 181.9 | (286.5 | ) | (47.6 | ) | 1,111.5 | |||||||||||||||||||||
Income (loss) continuing operations before income taxes | (0.5 | ) | (0.5 | ) | 841.8 | 187.5 | (314.3 | ) | (52.2 | ) | 1,155.5 | ||||||||||||||||||
Income tax expenses (benefits) | 1.9 | 1.8 | 7.3 | 1.6 | 11.6 | 1.9 | (2.3 | ) | |||||||||||||||||||||
Income (loss) from continuing operations | (2.5 | ) | (2.2 | ) | 834.5 | 185.9 | (325.8 | ) | (54.2 | ) | 1,157.9 | ||||||||||||||||||
Income (loss) from discontinued operations, net of taxes | 0.5 | 0.5 | 6.6 | 1.5 | (91.5 | ) | (15.2 | ) | 98.6 | ||||||||||||||||||||
Net income (loss) | $ | (2.0 | ) | (1.8 | )% | $ | 841.1 | 187.3 | % | $ | (417.3 | ) | (69.4 | )% | $ | 1,256.4 | |||||||||||||
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Successor | |||||||||||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||||||||||||||
Period | Period | ||||||||||||||||||||||||||||
Ended | Ended | Year Ended | |||||||||||||||||||||||||||
December 31, | October 25, | December 31, | |||||||||||||||||||||||||||
2009 | 2009 | 2008 | |||||||||||||||||||||||||||
% of | % of | % of | Change | ||||||||||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | Net Sales | Amount | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Display Solutions | $ | 51.0 | 46.0 | % | $ | 231.9 | 51.6 | % | $ | 304.1 | 50.5 | % | $ | (21.2 | ) | ||||||||||||||
Power Solutions | 4.7 | 4.3 | 7.6 | 1.7 | 5.4 | 0.9 | 6.9 | ||||||||||||||||||||||
Semiconductor Manufacturing Services | 54.8 | 49.3 | 206.7 | 46.0 | 287.1 | 47.7 | (25.7 | ) | |||||||||||||||||||||
All other | 0.5 | 0.5 | 2.8 | 0.6 | 5.0 | 0.8 | (1.7 | ) | |||||||||||||||||||||
$ | 111.1 | 100.0 | % | $ | 449.0 | 100.0 | % | $ | 601.7 | 100.0 | % | $ | (41.6 | ) | |||||||||||||||
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Successor | |||||||||||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||||||||||||||
Period | Period | ||||||||||||||||||||||||||||
Ended | Ended | Year Ended | |||||||||||||||||||||||||||
December 31, | October 25, | December 31, | |||||||||||||||||||||||||||
2009 | 2009 | 2008 | |||||||||||||||||||||||||||
% of | % of | % of | Change | ||||||||||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | Net Sales | Amount | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Korea | $ | 62.2 | 56.0 | % | $ | 244.3 | 54.4 | % | $ | 301.0 | 50.0 | % | $ | 5.5 | |||||||||||||||
Asia Pacific | 25.6 | 23.0 | 116.9 | 26.0 | 144.5 | 24.0 | (2.0 | ) | |||||||||||||||||||||
Japan | 6.5 | 5.8 | 31.6 | 7.0 | 79.9 | 13.3 | (41.8 | ) | |||||||||||||||||||||
North America | 14.9 | 13.4 | 48.5 | 10.8 | 61.3 | 10.2 | 2.0 | ||||||||||||||||||||||
Europe | 1.9 | 1.7 | 7.7 | 1.7 | 14.9 | 2.5 | (5.4 | ) | |||||||||||||||||||||
$ | 111.1 | 100.0 | % | $ | 449.0 | 100.0 | % | $ | 601.7 | 100.0 | % | $ | (41.6 | ) | |||||||||||||||
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Successor | |||||||||||||||||||||||||||||
Company | Predecessor Company | ||||||||||||||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||||||||||||||
Period | Period | ||||||||||||||||||||||||||||
Ended | Ended | Year Ended | |||||||||||||||||||||||||||
December 31, | October 25, | December 31, | |||||||||||||||||||||||||||
2009 | 2009 | 2008 | |||||||||||||||||||||||||||
% of | % of | % of | Change | ||||||||||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | Net Sales | Amount | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Display Solutions | $ | 8.7 | 17.1 | % | $ | 61.8 | 26.6 | % | $ | 57.4 | 18.9 | % | $ | 13.1 | |||||||||||||||
Power Solutions | 0.7 | 15.5 | 1.4 | 18.8 | (4.3 | ) | (78.6 | ) | 6.4 | ||||||||||||||||||||
Semiconductor Manufacturing Services | 10.7 | 19.5 | 71.8 | 34.8 | 98.4 | 34.3 | (15.9 | ) | |||||||||||||||||||||
All other | 0.5 | 100.0 | 2.8 | 100.0 | 4.9 | 97.3 | (1.6 | ) | |||||||||||||||||||||
$ | 20.7 | 18.6 | % | $ | 137.8 | 30.7 | % | $ | 156.4 | 26.0 | % | $ | 2.1 | ||||||||||||||||
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Predecessor Company | ||||||||||||||||||||
Year Ended | Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2008 | 2007 | |||||||||||||||||||
% of | % of | Change | ||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Net sales | $ | 601.7 | 100.0 | % | $ | 709.5 | 100.0 | % | $ | (107.8 | ) | |||||||||
Cost of sales | 445.3 | 74.0 | 578.9 | 81.6 | (133.6 | ) | ||||||||||||||
Gross profit | 156.4 | 26.0 | 130.7 | 18.4 | 25.8 | |||||||||||||||
Selling, general and administrative expenses | 81.3 | 13.5 | 82.7 | 11.7 | (1.4 | ) | ||||||||||||||
Research and development expenses | 89.5 | 14.9 | 90.8 | 12.8 | (1.4 | ) | ||||||||||||||
Restructuring and impairment charges | 13.4 | 2.2 | 12.1 | 1.7 | 1.3 | |||||||||||||||
Operating income (loss) from continuing operations | (27.7 | ) | (4.6 | ) | (54.9 | ) | (7.7 | ) | 27.2 | |||||||||||
Interest expense, net | (76.1 | ) | (12.7 | ) | (60.3 | ) | (8.5 | ) | (15.8 | ) | ||||||||||
Foreign currency gain (loss), net | (210.4 | ) | (35.0 | ) | (4.7 | ) | (0.7 | ) | (205.7 | ) | ||||||||||
(286.5 | ) | (47.6 | ) | (65.0 | ) | (9.2 | ) | (221.5 | ) | |||||||||||
Income (loss) continuing operations before income taxes | (314.3 | ) | (52.2 | ) | (120.0 | ) | (16.9 | ) | (194.3 | ) | ||||||||||
Income tax expenses | 11.6 | 1.9 | 8.8 | 1.2 | 2.8 | |||||||||||||||
Income (loss) from continuing operations, | (325.8 | ) | (54.2 | ) | (128.8 | ) | (18.2 | ) | (197.0 | ) | ||||||||||
Income (loss) from discontinued operations, net of taxes | (91.5 | ) | (15.2 | ) | (51.7 | ) | (7.3 | ) | (39.7 | ) | ||||||||||
Net income (loss) | $ | (417.3 | ) | (69.4 | )% | $ | (180.6 | ) | (25.4 | )% | $ | (236.7 | ) | |||||||
Predecessor Company | ||||||||||||||||||||
Year Ended | Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2008 | 2007 | |||||||||||||||||||
% of | % of | Change | ||||||||||||||||||
Amount | Total | Amount | Total | Amount | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Display Solutions | $ | 304.1 | 50.5 | % | $ | 331.7 | 46.7 | % | $ | (27.6 | ) | |||||||||
Power Solutions | 5.4 | 0.9 | — | — | 5.4 | |||||||||||||||
Semiconductor Manufacturing Services | 287.1 | 47.7 | 321.0 | 45.2 | (33.9 | ) | ||||||||||||||
All other | 5.0 | 0.8 | 56.8 | 8.0 | (51.8 | ) | ||||||||||||||
$ | 601.7 | 100.0 | % | $ | 709.5 | 100.0 | % | $ | (107.8 | ) | ||||||||||
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Predecessor Company | ||||||||||||||||||||
Year Ended | Year Ended | |||||||||||||||||||
December 31, 2008 | December 31, 2007 | |||||||||||||||||||
% of | % of | Change | ||||||||||||||||||
Amount | Total | Amount | Total | Amount | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Korea | $ | 301.0 | 50.0 | % | $ | 404.3 | 57.0 | % | (103.3 | ) | ||||||||||
Asia Pacific | 144.5 | 24.0 | 155.5 | 21.9 | (11.0 | ) | ||||||||||||||
Japan | 79.9 | 13.3 | 71.2 | 10.0 | 8.7 | |||||||||||||||
North America | 61.3 | 10.2 | 58.5 | 8.2 | 2.8 | |||||||||||||||
Europe | 14.9 | 2.5 | 20.0 | 2.8 | (5.1 | ) | ||||||||||||||
Total net revenues | $ | 601.7 | 100.0 | % | $ | 709.5 | 100.0 | % | (107.8 | ) | ||||||||||
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Predecessor Company | ||||||||||||||||||||
Year Ended | Year Ended | |||||||||||||||||||
December 31, 2008 | December 31, 2007 | |||||||||||||||||||
% of | % of | Change | ||||||||||||||||||
Amount | Net Sales | Amount | Net Sales | Amount | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Display Solutions | $ | 57.4 | 18.9 | % | $ | 41.5 | 12.5 | % | $ | 15.9 | ||||||||||
Power Solutions | (4.3 | ) | (78.6 | ) | — | — | (4.3 | ) | ||||||||||||
Semiconductor Manufacturing Services | 98.4 | 34.3 | 67.1 | 20.9 | 31.3 | |||||||||||||||
All other | 4.9 | 97.3 | 22.0 | 38.7 | (17.1 | ) | ||||||||||||||
$ | 156.4 | 26.0 | % | $ | 130.7 | 18.4 | % | $ | 25.8 | |||||||||||
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Successor(1) | Predecessor(1) | ||||||||||||||||||||||||
Three Months | Two-Month | One-Month | |||||||||||||||||||||||
Ended | Period Ended | Period Ended | Three Months Ended | ||||||||||||||||||||||
March 31, | December 31, | October 25, | September 27, | June 28, | March 29, | ||||||||||||||||||||
2010* | 2009** | 2009* | 2009* | 2009* | 2009* | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Statements of Operations Data: | |||||||||||||||||||||||||
Net sales | $ | 179.5 | $ | 111.1 | $ | 51.2 | $ | 156.6 | $ | 139.7 | $ | 101.5 | |||||||||||||
Cost of sales | 130.1 | 90.4 | 34.8 | 104.5 | 91.4 | 80.6 | |||||||||||||||||||
Gross profit | 49.4 | 20.7 | 16.5 | 52.2 | 48.3 | 20.9 | |||||||||||||||||||
Selling, general and administrative expenses | 17.9 | 14.5 | 5.5 | 17.2 | 18.4 | 15.3 | |||||||||||||||||||
Research and development expenses | 20.5 | 14.7 | 5.2 | 17.7 | 16.2 | 17.0 | |||||||||||||||||||
Restructuring and impairment charges | 0.3 | — | — | — | 0.4 | 0.1 | |||||||||||||||||||
Operating income (loss) from continuing operations | 10.6 | (8.6 | ) | 5.8 | 17.3 | 13.4 | (11.4 | ) | |||||||||||||||||
Interest expense, net | (2.0 | ) | (1.3 | ) | (1.0 | ) | (2.6 | ) | (12.8 | ) | (14.7 | ) | |||||||||||||
Foreign currency gain (loss), net | 21.6 | 9.3 | 7.4 | 45.4 | 30.8 | (40.2 | ) | ||||||||||||||||||
Reorganization items, net | — | — | 809.0 | (4.1 | ) | (0.3 | ) | — | |||||||||||||||||
Others | (0.1 | ) | — | — | — | — | — | ||||||||||||||||||
19.5 | 8.1 | 815.4 | 38.7 | 17.6 | (54.9 | ) | |||||||||||||||||||
Income (loss) from continuing operations before income taxes | 30.1 | (0.5 | ) | 821.2 | 56.0 | 31.0 | (66.3 | ) | |||||||||||||||||
Income tax expenses (benefits) | (1.0 | ) | 1.9 | (0.1 | ) | 2.4 | 2.4 | 2.6 | |||||||||||||||||
Income (loss) from continuing operations | 31.1 | (2.5 | ) | 821.3 | 53.5 | 28.6 | (68.9 | ) | |||||||||||||||||
Income (loss) from discontinued operations, net of taxes | — | 0.5 | (0.6 | ) | 8.9 | (1.0 | ) | (0.8 | ) | ||||||||||||||||
Net income (loss) | $ | 31.1 | $ | (2.0 | ) | $ | 820.7 | $ | 62.4 | $ | 27.6 | $ | (69.7 | ) | |||||||||||
Supplemental Data (unaudited): | |||||||||||||||||||||||||
Adjusted EBITDA(2) | $ | 28.7 | $ | 22.1 | $ | 10.6 | $ | 34.5 | $ | 29.3 | $ | 2.3 | |||||||||||||
Adjusted Net Income (Loss)(3) | 19.9 | 13.3 | 6.9 | 20.4 | 5.0 | (22.9 | ) |
* | Derived from our unaudited interim consolidated financial statements. |
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** | Derived from our audited consolidated financial statements. | |
(1) | As of October 25, 2009, the fresh-start adoption date, we adopted fresh-start accounting for our consolidated financial statements. Because of the emergence from reorganization proceedings and adoption of fresh-start accounting, the historical financial information for periods after October 25, 2009 is not fully comparable to periods before October 25, 2009. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Changes to Our Business.” | |
(2) | We define Adjusted EBITDA as net income (loss) less income (loss) from discontinued operations, net of taxes, adjusted to exclude (i) depreciation and amortization associated with continuing operations, (ii) interest expense, net, (iii) income tax expenses (benefits), (iv) restructuring and impairment charges, (v) other restructuring charges, (vi) abandoned IPO expenses, (vii) subcontractor claim settlement, (viii) the increase in cost of sales resulting from the fresh-start inventory accountingstep-up, (ix) equity-based compensation expense, (x) reorganization items, net and (xi) foreign currency gain (loss), net. A reconciliation of net income (loss) to Adjusted EBITDA is as follows: |
Successor | Predecessor | ||||||||||||||||||||||||
Three Months | Two-Month | One-Month | |||||||||||||||||||||||
Ended | Period Ended | Period Ended | Three Months Ended | ||||||||||||||||||||||
March 31, | December 31, | October 25, | September 27, | June 28, | March 29 | ||||||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Net income (loss) | $ | 31.1 | $ | (2.0 | ) | $ | 820.7 | $ | 62.4 | $ | 27.6 | $ | (69.7 | ) | |||||||||||
Less: Income (loss) from discontinued operations, net of taxes | — | 0.5 | (0.6 | ) | 8.9 | (1.0 | ) | (0.8 | ) | ||||||||||||||||
Income (loss) from continuing operations | 31.1 | (2.5 | ) | 821.3 | 53.5 | 28.6 | (68.9 | ) | |||||||||||||||||
Adjustments: | |||||||||||||||||||||||||
Depreciation and amortization associated with continuing operations | 15.5 | 11.2 | 3.6 | 11.9 | 11.7 | 10.4 | |||||||||||||||||||
Interest expense, net | 2.0 | 1.3 | 1.0 | 2.6 | 12.8 | 14.7 | |||||||||||||||||||
Income tax expenses (benefits) | (1.0 | ) | 1.9 | (0.1 | ) | 2.4 | 2.4 | 2.6 | |||||||||||||||||
Restructuring and impairment charges(a) | 0.3 | — | — | — | 0.4 | 0.1 | |||||||||||||||||||
Other restructuring charges(b) | — | — | 1.1 | 5.3 | 3.7 | 3.1 | |||||||||||||||||||
Reorganization items, net(c) | — | — | (809.0 | ) | 4.1 | 0.3 | — | ||||||||||||||||||
Inventorystep-up(d) | 0.9 | 17.2 | — | — | — | — | |||||||||||||||||||
Equity based compensation expense(e) | 1.5 | 2.2 | — | 0.1 | 0.1 | 0.1 | |||||||||||||||||||
Foreign currency loss (gain), net(f) | (21.6 | ) | (9.3 | ) | (7.4 | ) | (45.4 | ) | (30.8 | ) | 40.2 | ||||||||||||||
Adjusted EBITDA | $ | 28.7 | $ | 22.1 | $ | 10.6 | $ | 34.5 | $ | 29.3 | $ | 2.3 | |||||||||||||
(a) | This adjustment is comprised of all items included in the restructuring and impairment charges line item on our consolidated statements of operations, and eliminates the impact of restructuring and impairment charges related to (i) for the three months ended March 31, 2010, impairment of two abandoned in-process research and development projects, accounted for as indefinite-lived intangible assets as part of the application of fresh-start accounting and (ii) for the three months ended June 28 and March 29, 2009, termination |
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benefits and other related costs in connection with the closure of one of our research and development facilities in Japan. |
(b) | This adjustment relates to certain restructuring charges that are not included in the restructuring and impairment charges line item on our consolidated statements of operations. These items are included in selling, general and administrative expenses in our consolidated statements of operations. These charges are restructuring-related professional fees and related expenses incurred during each period. | |
(c) | This adjustment eliminates the impact of largely non-cash reorganization income and expense items directly associated with our reorganization proceedings from our ongoing operations including, among others, professional fees, the revaluation of assets, the effects of the Chapter 11 reorganization plan and fresh-start accounting principles and the write-off of debt issuance costs. These items are comprised of the following: (i) for the one-month period ended October 25, 2009, our predecessor’s gain recognized upon the effectiveness of the reorganization plan which was primarily composed of debt discharge gains and net of reorganization related professional fees and other charges, and (ii) for three months ended September 27 and June 28, 2009, professional fees incurred in connection with our reorganization proceedings. | |
(d) | This adjustment eliminates the one-time impact on cost of sales associated with thewrite-up of our inventory in accordance with the principles of fresh-start accounting upon consummation of the Chapter 11 reorganization. | |
(e) | This adjustment eliminates the impact of non-cash equity-based compensation expenses. | |
(f) | This adjustment eliminates the impact of non-cash foreign currency translation associated with intercompany debt obligations and foreign currency denominated receivables and payables, as well as the cash impact of foreign currency transaction gains or losses on collection of such receivables and payment of such payables. |
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(3) | We define Adjusted Net Income as net income (loss) less income (loss) from discontinued operations, net of taxes, excluding (i) restructuring and impairment charges, (ii) other restructuring charges, (iii) abandoned IPO expenses, (vi) subcontractor claim settlement, (v) reorganization items, net, (vi) the increase in cost of sales resulting from the fresh-start accounting inventorystep-up, (vii) equity based compensation expense, (viii) amortization of intangibles associated with continuing operations and (ix) foreign currency gain (loss). The following table summarizes the adjustments to net income (loss) that we make in order to calculate Adjusted Net Income for the periods indicated: |
Successor | Predecessor | ||||||||||||||||||||||||
Three Months | Two-Month | One-Month | |||||||||||||||||||||||
Ended | Period Ended | Period Ended | Three Months Ended | ||||||||||||||||||||||
March 31, | December 31, | October 25, | September 27, | June 28, | March 29 | ||||||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Net income (loss) | $ | 31.1 | $ | (2.0 | ) | $ | 820.7 | $ | 62.4 | $ | 27.6 | $ | (69.7 | ) | |||||||||||
Less: Income (loss) from discontinued operations, net of taxes | — | 0.5 | (0.6 | ) | 8.9 | (1.0 | ) | (0.8 | ) | ||||||||||||||||
Income (loss) from continuing operations | 31.1 | (2.5 | ) | 821.3 | 53.5 | 28.6 | (68.9 | ) | |||||||||||||||||
Adjustments: | |||||||||||||||||||||||||
Restructuring and impairment charges(a) | 0.3 | — | — | — | 0.4 | 0.1 | |||||||||||||||||||
Other restructuring charges(b) | — | — | 1.1 | 5.3 | 3.7 | 3.1 | |||||||||||||||||||
Reorganization items, net(c) | — | — | (809.0 | ) | 4.1 | 0.3 | — | ||||||||||||||||||
Inventorystep-up(d) | 0.9 | 17.2 | — | — | — | — | |||||||||||||||||||
Equity based compensation expense(e) | 1.5 | 2.2 | — | 0.1 | 0.1 | 0.1 | |||||||||||||||||||
Amortization of intangibles associated with continuing operations(f) | 7.7 | 5.6 | 0.9 | 2.8 | 2.7 | 2.4 | |||||||||||||||||||
Foreign currency loss (gain), net(g) | (21.6 | ) | (9.3 | ) | (7.4 | ) | (45.4 | ) | (30.8 | ) | 40.2 | ||||||||||||||
Adjusted Net Income (Loss) | $ | 19.9 | $ | 13.3 | $ | 6.9 | $ | 20.4 | $ | 5.0 | $ | (22.9 | ) | ||||||||||||
(a) | This adjustment is comprised of all items included in the restructuring and impairment charges line item on our consolidated statements of operations, and eliminates the impact of restructuring and impairment charges related to (i) for the three months ended March 31, 2010, impairment of two abandoned in-process research and development projects, accounted for as indefinite-lived intangible assets as part of the application of fresh-start accounting and (ii) for the three months ended June 28 and March 29, 2009, termination benefits and other related costs in connection with the closure of one of our research and development facilities in Japan. | |
(b) | This adjustment relates to certain restructuring charges that are not included in the restructuring and impairment charges line item on our consolidated statements of operations. These items are included in selling, general and administrative expenses in our consolidated statements of operations. These charges are restructuring-related professional fees and related expenses incurred during each period. | |
(c) | This adjustment eliminates the impact of largely non-cash reorganization income and expense items directly associated with our reorganization proceedings from our ongoing operations including, among others, professional fees, the revaluation of assets, the effects of the Chapter 11 reorganization plan and fresh-start accounting principles and the write-off of debt |
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issuance costs. These items are comprised of the following: (i) for the one-month period ended October 25, 2009, our predecessor’s gain recognized upon the effectiveness of the reorganization plan which was primarily composed of debt discharge gains and net of reorganization related professional fees and other charges, and (ii) for three months ended September 27 and June 28, 2009, professional fees incurred in connection with our reorganization proceedings. |
(d) | This adjustment eliminates the one-time impact on cost of sales associated with thewrite-up of our inventory in accordance with the principles of fresh-start accounting upon consummation of the Chapter 11 reorganization. | |
(e) | This adjustment eliminates the impact of non-cash equity-based compensation expenses. Although we expect to incur non-cash equity-based compensation expenses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these non-cash expenses, as supplemental information. | |
(f) | This adjustment eliminates the non-cash impact of amortization expense for intangible assets created as a result of the purchase accounting treatment of the Original Acquisition and other subsequent acquisitions, and from the application of fresh-start accounting in connection with the reorganization proceedings. | |
(g) | This adjustment eliminates the impact of non-cash foreign currency translation associated with intercompany debt obligations and foreign currency denominated receivables and payables, as well as the cash impact of foreign currency transaction gains or losses on collection of such receivables and payment of such payables. |
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Payments Due by Period | ||||||||||||||||||||||||||||
Total | 2010 | 2011 | 2012 | 2013 | 2014 | Thereafter | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
New term loan(1)(2) | $ | 62.9 | $ | 62.9 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Operating lease(3) | 51.3 | 4.9 | 2.2 | 1.9 | 1.9 | 1.9 | 38.5 | |||||||||||||||||||||
Others(4) | 10.1 | 2.5 | 4.5 | 2.6 | 0.5 | — | — |
(1) | Includes principal as well as interest payments, which were fully repaid in April 2010. | |
(2) | Excludes $250 million aggregate principal amount of senior notes issued in April 2010, which bear interest at a rate of 10.500% per annum and mature in 2018. | |
(3) | Assumes constant currency exchange rate for Korean won to U.S. dollars of 1,130.8:1. | |
(4) | Includes license agreements and other contractual obligations. |
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• | Broad Offering of Differentiated Products with Advanced System-Level Features and Functions. Leading consumer electronics manufacturers seek to differentiate their products by incorporating innovative semiconductor products that enable unique system-level functionality and enhance performance. These consumer electronics manufacturers seek to closely collaborate with semiconductor solutions providers that continuously develop new and advanced products, technologies, and manufacturing processes that enable state of the art features and functions, such as bright and thin displays, small form factor and energy efficiency. | |
• | Fast Time to Market with New Products. As a result of rapid technological advancements and short product lifecycles, our target customers typically prefer suppliers who have a compelling pipeline of new products and can leverage a substantial intellectual property and technology base to accelerate product design and manufacturing when needed. | |
• | Nimble, Stable and Reliable Manufacturing Services. Fabless semiconductor providers who rely on external manufacturing services often face rapidly changing product cycles. If these fabless companies are unable to meet the demand for their products due to issues with their manufacturing services providers, their profitability and market share can be significantly impacted. As a result, they prefer semiconductor manufacturing services providers who can increase production quickly and meet demand consistently through periods of constrained industry capacity. Furthermore, many fabless semiconductor providers serving the consumer electronics and industrial sectors need specialized analog and mixed-signal manufacturing capabilities to address their product performance and cost requirements. | |
• | Ability to Deliver Cost Competitive Solutions. Electronics manufacturers are under constant pressure to deliver cost competitive solutions. To accomplish this objective, they need strategic semiconductor suppliers that have the ability to provide system-level solutions, highly integrated products, a broad product offering at a range of price points and have the design and manufacturing infrastructure and logistical support to deliver cost competitive products. |
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• | Focus on Delivering Highly Energy Efficient Products. Consumers increasingly seek longer run time, environmentally friendly and energy efficient consumer electronic products. In addition, there is increasing regulatory focus on reducing energy consumption of consumer electronic products. For instance, the California Energy Commission recently adopted standards that require televisions sold in California to consume 33% less energy by 2011 and 49% less energy by 2013. As a result of global focus on more environmentally friendly products, our customers are seeking analog and mixed-signal semiconductor suppliers that have the technological expertise to deliver solutions that satisfy these ever increasing regulatory and consumer power efficiency demands. |
• | Advanced Analog and Mixed-Signal Semiconductor Technology and Intellectual Property Platform. We believe we have one of the broadest and deepest analog and mixed-signal semiconductor technology platforms in the industry. Our long operating history, large patent portfolio, extensive engineering and manufacturing process expertise and wide selection of analog and mixed-signal intellectual property libraries allow us to leverage our technology and develop new products across multiple end markets. Our product development efforts are supported by a team of approximately 391 engineers. Our platform allows us to develop and introduce new products quickly as well as to integrate numerous functions into a single product. For example, we were one of the first companies to introduce a commercial AMOLED display driver for mobile phones. | |
• | Established Relationships and Close Collaboration with Leading Global Electronics Companies. We have a long history of supplying and collaborating on product and technology development with leading innovators in the consumer electronics market. Our close customer relationships have been built based on many years of close collaborative product development which provides us with deep system level knowledge and key insights into our customers’ needs. As a result, we are able to continuously strengthen our technology platform in areas of strategic interest for our customers and focus on those products and services that our customers and end consumers demand the most. | |
• | Longstanding Presence in Asia and Proximity to Global Consumer Electronics Supply Chain. Our presence in Asia facilitates close contact with our customers, fast response to their needs and enhances our visibility into new product opportunities, markets and technology trends. According to Gartner, semiconductor consumption in Asia, excluding Japan, has increased from 49% of global production in 2004 to 60% in 2009 and is projected to grow to 65% by 2013. Our substantial manufacturing operations in Korea and design centers in Korea and Japan place us close to many of our largest customers and to the core of the global consumer electronics supply chain. We have active applications, engineering, product design, and customer support resources, as well as senior management and marketing resources, in geographic locations close to our customers. This allows us to strengthen our relationship with customers through better service, faster turnaround time and improved product design collaboration. We believe this also helps our customers to deliver products faster than their competitors and to solve problems more efficiently than would be possible with other suppliers. | |
• | Broad Portfolio of Product and Service Offerings Targeting Large, High-Growth Markets. We continue to develop a wide variety of analog and mixed-signal semiconductor solutions for |
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multiple high-growth consumer electronics end markets. We believe our expanding product and service offerings allow us to provide additional products to new and existing customers and to cross-sell our products and services to our established customers. For example, we have leveraged our technology expertise and customer relationships to develop and grow a new business offering power management solutions to customers. Our power management solutions enable our customers to increase system stability and reduce heat dissipation and energy use, resulting in cost savings for our customers, as well as environmental benefits. We have been able to sell these new products to our existing customers as well as expand our customer base. |
• | Distinctive Analog and Mixed-Signal Process Technology Expertise and Manufacturing Capabilities. We have developed specialty analog and mixed-signal manufacturing processes such as high voltage CMOS, power and embedded memory. These processes enable us to flexibly ramp mass production of display, power and mixed-signal products, and shorten the duration from design to delivery of highly integrated, high-performance analog and mixed-signal semiconductors. As a result of the depth of our process technology, captive manufacturing facilities and customer support capabilities, we believe the majority of our top twenty manufacturing services customers by revenue currently use us as their primary manufacturing source for the products that we manufacture for them. | |
• | Highly Efficient Manufacturing Capabilities. Our manufacturing strategy is focused on maintaining the price competitiveness of our products and services through our low-cost operating structure. We believe the location of our primary manufacturing and research and development facilities in Asia and relatively low required ongoing capital expenditures provide us with a number of cost advantages. We offer specialty analog process technologies that do not require substantial investment in leading edge, smaller geometry process equipment. We are able to utilize our manufacturing base over an extended period of time and thereby minimize our capital expenditure requirements. Our internal manufacturing facilities serve both our solutions products and manufacturing services customers, allowing us to optimize our asset utilization and improve our operational efficiency. | |
• | Strong Financial Model with a Low-Cost Structure. We have executed a significant restructuring over the last 18 months, which combined with our relatively low capital investment requirements, has improved our cash flow and profitability. By closing our Imaging Solutions business, restructuring our balance sheet, and refining our business processes and strategy, we believe we have made significant structural improvements to our operating model and have enabled better flexibility to manage the fluctuations in the economy and our markets. In addition, the long lifecycles of our manufacturing processes, equipment and facilities allow us to keep our new capital requirements relatively low. We believe that our low-cost but highly skilled design and support engineers and manufacturing base position us favorably to compete in the marketplace and provide operating leverage in our operating model. |
• | Leverage Our Advanced Analog and Mixed-Signal Technology Platform to Innovate and Deliver New Products and Services. We intend to continue to utilize our extensive patent and technology portfolio, analog and mixed-signal design and manufacturing expertise and specific end-market applications and system-level design expertise to deliver products with high levels of performance by utilizing our systems expertise and leveraging our deep knowledge of our customers’ needs. For example, we have recently utilized our extensive patent portfolio, process technologies and analog and mixed-signal technology platform to |
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develop cost-effective Super Junction MOSFETs as well as low power integrated power solutions for AC-DC offline switchers to address more of our customers’ needs. In Display Solutions, we continue to invest in research and development to introduce new technologies to support our customers’ technology roadmaps such as their transition to 240Hz 3D LED televisions. In Semiconductor Manufacturing Services, we are developing cost-effective processes that substantially reduce die size using deep trench isolation. |
• | Increase Business with Existing Customers. We have a global customer base consisting of leading consumer electronics OEMs who sell into multiple end markets. We intend to continue to strengthen our relationships with our customers by collaborating on critical design and product development in order to improve our design win rates. We will seek to increase our customer penetration by more closely aligning our product roadmap with those of our key customers and by taking advantage of our broad product portfolio, our deep knowledge of customer needs and existing relationships to sell more existing and new products. For example, two of our largest display driver customers have display modules in production using our power management products. These power management products have been purchased and evaluated via their key subcontractors for LCD backlight units and LCD integrated power supplies. | |
• | Broaden Our Customer Base. We expect to continue to expand our global design centers, local application engineering support and sales presence, particularly in China, Hong Kong, Taiwan and Macau, or collectively, Greater China, and other high-growth geographies, to penetrate new accounts. In addition, we intend to introduce new products and variations of existing products to address a broader customer base. In order to broaden our market penetration, we are complementing our direct customer relationships and sales with an expanded base of distributors, especially to aid the growth of our power management business. We expect to continue to expand our distribution channels as we broaden our power management penetration beyond existing customers. | |
• | Aggressively Grow the Power Business. We have utilized our extensive patent portfolio, process technologies, captive manufacturing facilities and analog and mixed-signal technology platform to develop power management solutions that expand our market opportunity and address more of our customers’ needs. We intend to increase the pace of our new power product introductions by continuing to collaborate closely with our industry-leading customers. For example, we recently began mass production of our first integrated power solution for LCD televisions at one of our major Korean customers. We also intend to capitalize on the market needs and regulatory requirements for power management products that reduce energy consumption of consumer electronic products by introducing products that are more energy efficient than those of competitors. We believe our integrated designs, unique low-cost process technologies and deep customer relationships will enable us to increase sales of our power solutions to our current power solutions customers, and as an extension of our other product offerings, to our other customers. | |
• | Drive Execution Excellence. We have significantly improved our execution through a number of management initiatives implemented under the direction of our Chief Executive Officer and Chairman, Sang Park. As an example, we have introduced new processes for product development, customer service and personnel development. We expect these ongoing initiatives will continue to improve our new product development and customer service as well as enhance our commitment to a culture of quick action and execution by our workforce. In addition, we have focused on and continually improved our manufacturing efficiency during the past several years. As a result of our focus on execution excellence, we have also meaningfully reduced our time from new product definition to development completion. For example, we have improved our average development turnaround time by over 40% over the last three years for semiconductor manufacturing services by implementing continuous |
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business process improvement initiatives and we improved our manufacturing productivity per operator by 22% from the fourth quarter of 2008 to the fourth quarter of 2009. |
• | Optimize Asset Utilization, Return on Capital Investments and Cash Flow Generation. We intend to keep our capital expenditures relatively low by maintaining our focus on specialty process technologies that do not require substantial investment in frequent upgrades to the latest manufacturing equipment. We also believe our power management business should increase our utilization and return on capital as the manufacturing of these products primarily relies on our 0.35mum geometry and low-cost equipment. By utilizing our manufacturing facilities for both our display solutions and power solutions products and our semiconductor manufacturing services customers, we will seek to maximize return on our capital investments and our cash flow generation. |
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• | Resolution and Number of Channels. Resolution determines the level of detail displayed within an image and is defined by the number of pixels per line multiplied by the number of lines on a display. For large displays, higher resolution typically requires more display drivers for each panel. Display drivers that have a greater number of channels, however, generally require fewer display drivers for each panel and command a higher selling price per unit. Mobile displays, conversely, are typically single chip solutions designed to deliver a specific resolution. We cover resolutions ranging from QVGA (240RGB x 320) to QHD (960RGB x 540). | |
• | Color Depth. Color depth is the number of colors that can be displayed on a panel. For example, for TFT-LCD panels, 262 thousand colors are supported by 6-bit source drivers; 16 million colors are supported by 8-bit source drivers; and 1 billion colors are supported by 10-bit and 12-bit source drivers. | |
• | Operational Voltage. Display drivers are characterized by input and output voltages. Source drivers typically operate at input voltages from 2.0 to 3.6 volts and output voltages between 4.5 and 18 volts. Gate drivers typically operate at input voltages from 2.0 to 3.6 volts and output voltages of up to 40 volts. Lower input voltage results in lower power consumption and electromagnetic interference, or EMI. | |
• | Gamma Curve. The relationship between the light passing through a pixel and the voltage applied to the pixel by the source driver is referred to as the gamma curve. The gamma curve of the source driver can correct some imperfections in picture quality in a process generally known as gamma correction. Some advanced display drivers feature up to three independent gamma curves to facilitate this correction. | |
• | Driver Interface. Driver interface refers to the connection between the timing controller and the display drivers. Display drivers increasingly require higher bandwidth interface technology to address the larger data transfer rate necessary for higher definition images. The principal types of interface technologies aretransistor-to-transistor logic, or TTL, reduced swing differential signaling, or RSDS, advance intra panel I/F, or AIPI, and mini-low voltage differential signaling, or m-LVDS. | |
• | Package Type. The assembly of display drivers typically useschip-on-film, or COF, tape carrier package, or TCP, and COG package types. |
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Product | Key Features | Applications | ||
TFT-LCD Source Drivers | • 480 to 960 output channels | • LCD monitors, including widescreens | ||
• 6-bit (262 thousand colors), 8-bit (16 million colors), 10-bit (1 billion colors) | • Mobile PCs, including netbooks | |||
• Output voltage ranging from 3.3V to 18V | • Digital televisions, including LED TVs | |||
• Low power consumption and low EMI | ||||
• Supports COF package types | ||||
• Supports RSDS, m-LVDS, AiPi* interface technologies | ||||
• Geometries of 0.18mum to 0.22mum | ||||
TFT-LCD Gate Drivers | • 272 to 768 output channels | • LCD monitors, including widescreens | ||
• Output voltage ranging up to 40V | • Mobile PCs, including netbooks | |||
• Supports COF and COG package types | • Digital televisions, including LED TVs | |||
• Geometries of 0.35mum | ||||
Timing Controllers | • Product portfolio supports a wide range of resolutions | • LCD monitors, including widescreens | ||
• Supports m-LVDS interface technologies | • Mobile PCs, including netbooks | |||
• Input voltage ranging from 2.3V to 3.6V | ||||
• Geometries of 0.18mum |
* | In customer qualification stage |
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Product | Key Features | Applications | ||
LTPS | • Resolutions of QVGA, WQVGA, VGA, NHD*, SVGA | • Mobile phones | ||
• Color depth ranging from 262 thousand to 16 million | • Digital still cameras | |||
• MDDI, MIPI interface | ||||
• EEPROM and logic-based OTP, separated gamma control | ||||
AMOLED | • Resolutions of WQVGA, HVGA, NHD*, WVGA, QHD | • Mobile phones | ||
• Game consoles | ||||
• Color depth ranging from 262 thousand to 16 million | • Digital still cameras | |||
• Personal digital assistants | ||||
• Geometries of 0.11mum to 0.15mum | • Portable media players | |||
• MDDI, MIPI interface | ||||
• EEPROM and logic-based OTP | ||||
• ABC, ACL, Pentile | ||||
a-Si TFT | • Resolutions of QVGA, WQVGA, HVGA, WVGA, WSVGA, HD | • Mobile phones | ||
• Game consoles | ||||
• Netbooks | ||||
• Color depth ranging from 262 thousand to 16 million | • Portable navigation devices | |||
• MDDI, MIPI interface | ||||
• Content adaptive brightness control, or CABC | ||||
• LVDS, I(2)C*, DCDC* | ||||
• Separated gamma control |
* | In customer qualification stage |
• | MOSFET. Our MOSFETs include low-voltage Trench MOSFETs, 20V to 100V, and high-voltage Planar MOSFETs, 400V through 600V. MOSFETs are used in applications to switch, shape or transfer electricity under varying power requirements. The key application segments are mobile phones, LCD televisions, desktop computers and power supplies for consumer electronics and industrial equipment. MOSFETs allow electronics manufacturers to achieve specific design goals of high efficiency and low standby power consumption. For example, computing solutions focus on delivering efficient controllers and MOSFETs for power management in VCORE, DDR and chipsets for audio, video and graphics processing systems. |
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• | LED Drivers. LED driver solutions serve the fast-growing LCD panel backlighting market for LCD televisions and mobile PCs. Our products are designed to provide high efficiency and wide input voltage range as well as PWM dimming for accurate white LED dimming control. | |
• | DC-DC Converters. We plan to release DC-DC converters targeting mobile applications and high power applications like LCD televisions, set-top boxes, DVD/Blu-ray players and display modules. We expect our DC-DC converters will meet customer green power requirements by featuring wide input voltage ranges, high efficiency and small size. | |
• | Analog Switches and Linear Regulators. We also provide analog switches and linear regulators for mobile applications. Our products are designed for high efficiency and low power consumption in mobile applications. |
Product | Key Features | Applications | ||
Low Voltage MOSFET | • V(ds)(V) options of 20V — 100V • R(ds)(on) options of Max 5m Ω–50m Ω at 10V • Advanced 0.35mum Trench MOSFET Process • High cell density of 268Mcell/inch(2) • Advanced packages to enable reduction of PCB mounting area | • Mobile phones • Desktop computers • Mobile PCs • Digital TVs | ||
High Voltage MOSFET | • Voltage options of 400, 500, and 600V • Drain current options of 1A — 18A. • R(ds)(on) options of 0.22~8.0* Ω (typical) | • Power supplies for consumer electronics • Industrial charger and adaptors • Lighting (ballast, HID, LED) • Industrial equipment | ||
• R(2)FET (rapid recovery) option to shorten reverse diode recovery time • Zenor FET option for MOSFET protection for abnormal input • Advanced 0.50mum Planar MOSFET Process |
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Product | Key Features | Applications | ||
LED Drivers | • High efficiency, wide input voltage range • Proven 0.35mum BCDMOS process • 40V modular BCDMOS • OCP, SCP, OVP and UVLO protections • Accurate LED current control and multi-channel matching • Programmable current limit, boost up frequency | • LED backlights | ||
DC-DC Converters* | • High efficiency, wide input voltage range | • LCD TVs • Set-top boxes | ||
• Proven 0.35mum BCDMOS process • 30V modular BCDMOS • Fast load and line regulation • Accurate output voltage • OCP, SCP and thermal protections | • DVD/Blu-ray players | |||
Analog Switches | USB Switches | • Mobile phones | ||
• Low C(on), 7.0pF (typical) limits signal distortion • Low R(on), 4.0 Ω (typical) • 0.35mum CMOS processAudio Switches • Negative Swing Support • Low R(on), 0.4 Ω (typical) • High ESD protection, 13kV • 0.35mum CMOS process | ||||
Linear Regulators | • Single and dual* LDOs • Low Noise Output Linear muCap LDO Regulator • 2.3V to 5.5V input voltage and 150mA, 300mA* output current • Small package size of DFN type • 0.35mum CMOS process | • Mobile phones |
* | In customer qualification stage |
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• | Mixed-Signal. Mixed-signal process technology is used in devices that require conversion of light and sound into electrical signals for processing and display. Our mixed-signal processes include advanced technologies such as low noise process using triple gate, which uses less power at any given performance level. MEMS process technology allows the manufacture of components that use electrical energy to generate a mechanical response. For example, MEMS devices are used in the accelerometers and gyroscopes of mobile phones. | |
• | Power. Power process technology, such as BCD, includes high voltage capabilities as well as the ability to integrate functionality such as self-regulation, internal protection, and other intelligent features. The unique process features such as deep trench isolation are suited for chip shrink and device performance enhancement. | |
• | High Voltage CMOS. High voltage CMOS process technology facilitates the use of high voltage levels in conjunction with smaller transistor sizes. This process technology includes several variations, such as bipolar processes, which use transistors with qualities well suited for amplifying and switching applications, mixed mode processes, which incorporate denser, more power efficient FETs, and thick metal processes. | |
• | Non-Volatile Memory. Non-volatile memory, or NVM, process technology enables the integration of non-volatile memory cells that allow retention of the stored information even when power is removed from the circuit. This type of memory is typically used for long-term persistent storage. |
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Process | Technology | Device | End Markets | |||
Mixed-signal | • 0.13-0.8mum • Multipurpose • Low noise • Ultra low power • Triple gate | • Analog to digital converter • Digital to analog converter • Audio codec • Chipset | • Consumer • Wireless • Computing | |||
Power | • 0.18-0.35mum • aBCD • Deep Trench Isolation • Trench MOSFET • Planar MOSFET • Schottky Diode • Zener Diode | • Power management • Mobile PMIC • LED drivers | • Consumer • Wireless • Computing | |||
High Voltage CMOS | • 0.13-2.0mum • 5V-250V • Bipolar, Thick Metal | • Display drivers • CSTN drivers | • Consumer • Wireless • Computing | |||
NVM | • 0.18-0.5mum • EEPROM • eFlash • OTP | • Microcontroller • Touch screen controller • Electronic tag • Hearing aid | • Consumer • Medical • Automotive |
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Name | Age | Position | ||||
Sang Park | 63 | Chairman of the Board of Directors and Chief Executive Officer | ||||
Tae Young Hwang | 54 | Chief Operating Officer and President | ||||
Brent Rowe | 49 | Senior Vice President, Worldwide Sales | ||||
Margaret Sakai | 53 | Senior Vice President and Chief Financial Officer | ||||
Heung Kyu Kim | 46 | Senior Vice President and General Manager, Power Solutions Division | ||||
Tae Jong Lee | 47 | Senior Vice President and General Manager, Corporate Engineering | ||||
John McFarland | 43 | Senior Vice President, General Counsel and Secretary | ||||
Michael Elkins | 42 | Director | ||||
Randal Klein | 45 | Director | ||||
R. Douglas Norby | 74 | Director | ||||
Gidu Shroff | 64 | Director | ||||
Steven Tan | 34 | Director | ||||
Nader Tavakoli | 52 | Director |
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• | Class I Directors will be Messrs. Norby and Shroff, and their terms will expire at the annual general meeting of stockholders to be held in 2011; | |
• | Class II Directors will be Messrs. Klein and Tavakoli, and their terms will expire at the annual general meeting of stockholders to be held in 2012; and | |
• | Class III Directors will be Mssrs. Elkins, Park and Tan, and their terms will expire at the annual general meeting of stockholders to be held in 2013. |
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• | Sang Park, Chairman of the Board of Directors and Chief Executive Officer; | |
• | Tae Young Hwang, Chief Operating Officer and President; | |
• | Brent Rowe, Senior Vice President, Worldwide Sales; | |
• | Margaret Sakai, Senior Vice President and Chief Financial Officer; and | |
• | John McFarland, Senior Vice President, General Counsel and Secretary. |
• | we maintain our ability to attract and retain superior executives in critical positions; |
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• | our executives are incentivized and rewarded for aggressive corporate growth, achievement of long-term corporate objectives and individual performance that meets or exceeds our expectations without encouraging unnecessary risk-taking; and | |
• | compensation provided to critical executives remains competitive relative to the compensation paid to similarly situated executives of companies in the semiconductor industry. |
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• | annual base salary; | |
• | short-term cash incentives; | |
• | long-term equity incentives; | |
• | a benefits package that is generally available to all of our employees; and | |
• | expatriate and other executive benefits. |
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• Accenture • Advanced Micro Devices • Applied Materials • ASML • Blizzard • Cisco Systems • CJ Internet | • CommVerge • CSR • Dell • Electronic Arts • GCT Semiconductor • Gravity • JCEntertainment • KLA-Tencor | • Lam Research • Lexmark International • Microsoft • NCsoft • Neowiz Games • NHN Games • Npluto | • NXP Semiconductors • Orange Business Services • Sony Computer Entertainment • Tokyo Electron • Toshiba Group • Verizon Business |
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Change in | ||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||
Value | ||||||||||||||||||||||||||||||||
and Non- | ||||||||||||||||||||||||||||||||
qualified | ||||||||||||||||||||||||||||||||
Deferred | ||||||||||||||||||||||||||||||||
Compen- | All Other | |||||||||||||||||||||||||||||||
Unit | Option | sation | Compen- | |||||||||||||||||||||||||||||
Name and Principal | Salary | Bonus | Awards | Awards | Earnings | sation | Total | |||||||||||||||||||||||||
Position | Year | ($)(1) | ($) | ($)(2) | ($)(2) | ($)(3) | ($) | ($) | ||||||||||||||||||||||||
Sang Park | 2009 | 979,611 | (4) | 11,262 | 1,769,600 | 488,070 | 314,785 | (5) | 3,563,328 | |||||||||||||||||||||||
Chairman and | 2008 | 442,128 | 351,897 | (6) | 794,025 | |||||||||||||||||||||||||||
Chief Executive Officer | 2007 | 450,148 | 309,330 | 244,468 | (7) | 1,003,946 | ||||||||||||||||||||||||||
Tae Young Hwang, | 2009 | 189,748 | 106,544 | 663,600 | 305,044 | 119,541 | 10,884 | (8) | 1,395,361 | |||||||||||||||||||||||
Chief Operating | 2008 | 212,307 | 99,095 | 20,293 | (9) | 331,695 | ||||||||||||||||||||||||||
Officer and President | 2007 | 236,830 | 119,339 | 19,735 | 11,476 | (10) | 387,380 | |||||||||||||||||||||||||
Brent Rowe | 2009 | 398,554 | (11) | 70,500 | 442,400 | 183,026 | 12,231 | (12) | 1,106,711 | |||||||||||||||||||||||
Senior Vice President, | 2008 | 226,308 | 176,000 | (13) | 25,673 | (14) | 427,981 | |||||||||||||||||||||||||
Worldwide Sales | 2007 | 220,846 | 176,000 | (15) | 142,191 | (16) | 539,037 | |||||||||||||||||||||||||
Margaret Sakai | 2009 | 238,347 | 46,549 | 265,440 | 73,211 | 12,143 | 163,668 | (17) | 799,358 | |||||||||||||||||||||||
Senior Vice President, | 2008 | 250,934 | 37,683 | 180,025 | (18) | 468,642 | ||||||||||||||||||||||||||
Chief Financial Officer | 2007 | 250,082 | 21,569 | 24,086 | 167,791 | (19) | 463,528 | |||||||||||||||||||||||||
John McFarland, | 2009 | 172,229 | 44,764 | 265,440 | 48,807 | 14,369 | 99,615 | (20) | 645,224 | |||||||||||||||||||||||
Senior Vice President, | 2008 | 191,147 | 21,492 | 79,790 | (21) | 292,429 | ||||||||||||||||||||||||||
General Counsel and | 2007 | 201,839 | 75,930 | 23,195 | 22,802 | 97,334 | (22) | 421,100 | ||||||||||||||||||||||||
Secretary | ||||||||||||||||||||||||||||||||
Robert J. Krakauer, | 2009 | 467,265 | 176,554 | (23) | 643,819 | |||||||||||||||||||||||||||
Former President and | 2008 | 468,426 | 820,236 | (24) | 1,288,662 | |||||||||||||||||||||||||||
Chief Financial Officer | 2007 | 375,123 | 270,903 | 707,831 | (25) | 1,353,857 |
(1) | Includes one-time payment of 10% of base salary paid from April to June 2009 to all employees that voluntarily accepted pay reductions earlier in the year, including $22,204, $4,897, $6,000 and $6,415 paid to Mr. Park, Mr. Hwang, Mr. Rowe and Ms. Sakai, respectively. | |
(2) | Represents grant date fair value with respect to the fiscal year determined in accordance with FASB ASC 718. See “Note 4 Summary of Significant Accounting Policies — Unit-Based Compensation,” and “Note 19 Equity Incentive Plans,” to the MagnaChip Semiconductor LLC audited consolidated financial statements for the two months ended December 31, 2009, the ten months ended October 25, 2009 and the years ended 2008 and 2007. | |
(3) | Consists of statutory severance accrued during the two months ended December 31, 2009, ten months ended October 25, 2009 and the years ended December 31, 2008 and 2007, as applicable. See the section subtitled “Compensation Discussion and Analysis” for a description of the statutory severance benefit. | |
(4) | Includes a fixed one-time bonus payment of $602,631 made in December 2009 pursuant to Mr. Park’s Amended and Restated Service Agreement. Mr. Park elected to forego $298,000 of |
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the bonus payable pursuant to his service agreement in order for such amounts to be available for bonuses to other executives. | ||
(5) | Includes the following personal benefits paid to Mr. Park: (a) $125,073, which is the annual aggregate monthly pro rata amount of prepaid housing expenses for Mr. Park’s housing lease; (b) $28,386 for insurance premiums; (c) $48,319 for other personal benefits (including reimbursement of the use of a car, home leave flights, living expenses and personal tax advisory expenses); and (d) $89,252 of reimbursement for the difference between the actual tax Mr. Park already paid and the hypothetical tax he had to pay for the fiscal year 2008; and (e) $23,755 for reimbursement of Korean tax. | |
(6) | Includes the following personal benefits paid to Mr. Park: (a) $70,838, which is the aggregate monthly pro rata amount of prepaid housing expenses for Mr. Park’s housing lease for six months, $82,828, which is the total monthly rental payments for seven months’ rent for Mr. Park’s housing, and $8,192, which is the imputed benefit to Mr. Park from a refundable deposit held by the lessor of Mr. Park’s housing during the lease term; (b) $27,290 for insurance premiums; (c) $35,787 for other personal benefits (including reimbursement of the use of a car, home leave flights and personal tax advisory expenses); (d) $78,913 of reimbursement for the difference between the actual tax Mr. Park already paid and the hypothetical tax he had to pay for the fiscal year 2006 and 2007; (e) $24,962 for Mr. Park’s living expenses; and (f) $23,087 for reimbursement of Korean tax and employee fringe benefits. | |
(7) | Includes the following personal benefits paid to Mr. Park: (a) $154,798 which is the annual aggregate monthly pro rata amount of prepaid housing expenses for Mr. Park’s housing lease; (b) $42,684 for insurance premiums (c) $31,750 for other personal benefits (including personal tax advisory expenses); (d) $1,188 of reimbursement in relation to a Korean tax payment in 2006; and (e) $14,048 for reimbursement of Korean tax, the employee contribution portion of the Korean national health insurance program and employee fringe benefits. | |
(8) | Includes the following personal benefits paid to Mr. Hwang: (a) $7,832 for reimbursement of the use of a car; and (b) $3,052 for insurance premiums. | |
(9) | Includes the following personal benefits paid to Mr. Hwang: (a) $9,541 for reimbursement of the use of a car; (b) $9,070 for insurance premiums; and (c) $1,682 for employee fringe benefits. | |
(10) | Includes the following personal benefits paid to Mr. Hwang: (a) $11,056 for reimbursement of the use of a car; and (b) $420 for employee fringe benefits. | |
(11) | Includes a $176,000 fixed non-discretionary payment under Mr. Rowe’s offer letter (as supplemented), pursuant to which in 2007 Mr. Rowe elected to receive a $528,000 advance on his first three years of potential annual bonus payments at a rate of 80% of base pay. Effective as of April 2009, the right to receive the bonus became fixed and was no longer discretionary. | |
(12) | Includes the following personal benefits paid to Mr. Rowe: (a) $1,597 for reimbursement of the use of a car; and (b) $10,634 for insurance premiums. | |
(13) | Under Mr. Rowe’s offer letter (as supplemented), in 2007, Mr. Rowe elected to receive a $528,000 advance on his first three years of potential annual bonus payments at a rate of 80% of base pay. One-third of this amount ($176,000) was earned in 2008. | |
(14) | Includes the following personal benefits paid to Mr. Rowe: (a) $1,983 for reimbursement of the use of a car; (b) $13,027 for insurance premiums; and (c) $10,663 for personal tax advisory expenses. |
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(15) | Under Mr. Rowe’s offer letter (as supplemented), in 2007, Mr. Rowe elected to receive a $528,000 advance on his first three years of potential annual bonus payments at a rate of 80% of base pay. One-third of this amount ($176,000) was earned in 2007. | |
(16) | Includes the following personal benefits paid to Mr. Rowe: (a) $121,826 of Mr. Rowe’s relocation allowance when he returned to the U.S. from an expatriate assignment in Korea; (b) $3,000 for contributions to a pension plan; (c) $4,967 for personal tax advisory expenses; (d) $12,130 for insurance premiums; and (e) $268 for reimbursement of the use of a car. | |
(17) | Includes the following personal benefits paid to Ms. Sakai: (a) $25,590, which is the total monthly rental payments for four months rent for MS. Sakai’s housing, and $32,650, which is the imputed benefit to Ms. Sakai from a refundable deposit held by the lessor of Ms. Sakai’s housing during the lease term; (b) $33,735 for reimbursement of tuition expenses for Ms. Sakai’s children; (c) $21,352 for Ms. Sakai’s home leave flights; (d) $28,238 for insurance premiums; (e) $8,568 for other personal benefits (including reimbursement of the use of a car, personal tax advisory expenses, and communication expenses); and (f) $13,535 for reimbursement of Korean tax. | |
(18) | Includes the following personal benefits paid to Ms. Sakai: (a) $61,438, which is the imputed benefit to Ms. Sakai from a refundable deposit held by the lessor of Ms. Sakai’s housing during the lease term; (b) $38,046 for reimbursement of tuition expenses for Ms. Sakai’s children; (c) $23,420 for Ms. Sakai’s home leave flights; (d) $27,211 for insurance premiums; (e) $21,460 for other personal benefits (including reimbursement of the use of a car, personal tax advisory expenses, and communication expenses); and (f) $8,450 for reimbursement of Korean tax and employee fringe benefits. | |
(19) | Includes the following personal benefits paid to Ms. Sakai: (a) $72,661, which is the imputed benefit to Ms. Sakai from a refundable deposit held by the lessor of Ms. Sakai’s housing during the lease term; (b) $30,649 for reimbursement of tuition expenses for Ms. Sakai’s children; (c) $18,709 for Ms. Sakai’s home leave flights; (d) $28,140 for insurance premiums; (e) $13,673 for other personal benefits (including reimbursement of the use of a car, personal tax advisory expenses, and communication expenses); and (f) $3,959 for reimbursement of the employee contribution portion of the Korean national health insurance program and employee fringe benefits. | |
(20) | Includes the following personal benefits paid to Mr. McFarland: (a) $23,351 for reimbursement of tuition expenses for Mr. McFarland’s child; (b) $19,978 of reimbursement for the difference between the actual tax Mr. McFarland already paid and the hypothetical tax he had to pay for the fiscal year 2008; (c) $20,227 for insurance premiums; (d) $1,089 for other personal benefits (including reimbursement of the use of a car and personal tax advisory expenses); and (e) $34,970 for reimbursement of Korean tax. | |
(21) | Includes the following personal benefits paid to Mr. McFarland: (a) $21,334 for reimbursement of tuition expenses for Mr. McFarland’s child; (b) $13,382 of reimbursement for the difference between the actual tax Mr. McFarland already paid and the hypothetical tax he had to pay for the fiscal year 2007; (c) $19,736 for insurance premiums paid; (d) $12,296 for other personal benefits (including reimbursement of the use of a car and personal tax advisory expenses); and (e) $13,042 for reimbursement of Korean tax and employee fringe benefits. | |
(22) | Includes the following personal benefits paid to Mr. McFarland: (a) $35,837 for reimbursement of tuition expenses for Mr. McFarland’s child; (b) $20,292 of reimbursement for the difference between the actual tax Mr. McFarland already paid and the hypothetical tax he had to pay for the fiscal year 2006; (c) $23,534 for insurance premiums; (d) $5,050 for other personal benefits (including reimbursement of the use of a car and personal tax advisory expenses); and (e) $12,621 for reimbursement of Korean tax, the employee contribution portion of the Korean national health insurance program and employee fringe benefits. |
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(23) | Includes the following personal benefits paid to Mr. Krakauer: (a) $145,460 for Mr. Krakauer’s housing expenses; (b) $24,329 for insurance premiums; and (c) $6,765 for other personal benefits (including reimbursement of the use of a car and living expenses). | |
(24) | Includes the following personal benefits paid to Mr. Krakauer: (a) $225,940 for Mr. Krakauer’s housing expenses; (b) $97,827 for reimbursement of living expenses; (c) $29,246 for reimbursement of tuition expenses for Mr. Krakauer’s children; (d) $23,860 for Mr. Krakauer’s home leave flights; (e) $22,842 for insurance premiums; (f) $22,404 for reimbursement of the use of two cars; (g) $49,789 for personal tax advisory expenses; (h) $248,302 of reimbursement for the difference between the actual tax Mr. Krakauer already paid and the hypothetical tax he had to pay for the fiscal year 2006, 2007 and 2008; (i) $29,604 for repatriation allowance paid to Mr. Krakauer; and (j) $70,422 for reimbursement of Korean tax and employee fringe benefits. | |
(25) | Includes the following personal benefits paid to Mr. Krakauer: (a) $208,962, which is the annual aggregate monthly pro rata amount of prepaid housing expenses for Mr. Krakauer’s housing lease; (b) $30,643 for reimbursement of living expenses; (c) $71,683 for reimbursement of tuition expenses for Mr. Krakauer’s children; (d) $20,242 for Mr. Krakauer’s home leave flights; (e) $43,823 for insurance premiums; (f) $63,791 of reimbursement for all commission and closing costs for the sale of Mr. Krakauer’s house in the United States; (g) $12,581 for personal tax advisory expenses; (h) $21,748 for reimbursement of the use of two cars; (i) $147,490 of reimbursement for the difference between the actual tax Mr. Krakauer already paid and the hypothetical tax he had to pay for the fiscal year 2006; and (j) $86,868 for reimbursement of Korean tax, the employee contribution portion of the Korean national health insurance program and employee fringe benefits. |
All Other | ||||||||||||||||||
Option | ||||||||||||||||||
All Other | Awards: | Exercise or | ||||||||||||||||
Unit | Number of | Base | ||||||||||||||||
Awards: | Securities | Price of | Grant Date Fair | |||||||||||||||
Number of | Underlying | Option | Value of Unit | |||||||||||||||
Units | Options | Awards | and Option | |||||||||||||||
Name | Grant Date | (#)(1) | (#)(1) | ($/unit)(2) | Awards ($)(3) | |||||||||||||
Sang Park | 12/08/2009 | 2,240,000 | $ | 1,769,600 | ||||||||||||||
12/08/2009 | 2,240,000 | 1.16 | $ | 488,070 | ||||||||||||||
Tae Young Hwang | 12/08/2009 | 840,000 | $ | 663,600 | ||||||||||||||
12/08/2009 | 1,400,000 | 1.16 | $ | 305,044 | ||||||||||||||
Brent Rowe | 12/08/2009 | 560,000 | $ | 442,400 | ||||||||||||||
12/08/2009 | 840,000 | 1.16 | $ | 183,026 | ||||||||||||||
Margaret Sakai | 12/08/2009 | 336,000 | $ | 265,440 | ||||||||||||||
12/08/2009 | 336,000 | 1.16 | $ | 73,211 | ||||||||||||||
John McFarland | 12/08/2009 | 336,000 | $ | 265,440 | ||||||||||||||
12/08/2009 | 224,000 | 1.16 | $ | 48,807 |
(1) | The vesting schedule applicable to each award is set forth below in the section entitled “Outstanding Equity Awards at Fiscal Year End 2009.” | |
(2) | Exceeds the per unit fair market value of our common units on the grant date ($0.79), as determined by our board of directors based on various factors. |
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(3) | Represents ASC 718 grant date fair value. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Accounting for Unit-based Compensation” for a description of how we valued our units as a private company. |
Outstanding Equity Awards at Fiscal Year End 2009(1) | ||||||||||||||||||||||||
Option Awards | Unit Awards | |||||||||||||||||||||||
Number of | Number of | Number of | Market | |||||||||||||||||||||
Securities | Securities | Units | Value of | |||||||||||||||||||||
Underlying | Underlying | That | Units | |||||||||||||||||||||
Unexercised | Unexercised | Option | Option | Have Not | That | |||||||||||||||||||
Options (#) | Options (#) | Exercise | Expiration | Vested | Have Not | |||||||||||||||||||
Name | Exercisable | Unexercisable(2) | Price ($) | Date | (#)(3) | Vested ($)(4) | ||||||||||||||||||
Sang Park | — | 2,240,000 | 1.16 | 12/8/2019 | 1,478,400 | 1,167,936 | ||||||||||||||||||
Tae Young Hwang | — | 1,400,000 | 1.16 | 12/8/2019 | 554,400 | 437,976 | ||||||||||||||||||
Brent Rowe | — | 840,000 | 1.16 | 12/8/2019 | 369,600 | 291,984 | ||||||||||||||||||
Margaret Sakai | — | 336,000 | 1.16 | 12/8/2019 | 221,760 | 175,190 | ||||||||||||||||||
John McFarland | — | 224,000 | 1.16 | 12/8/2019 | 221,760 | 175,190 |
(1) | All of our outstanding common and preferred units and outstanding options as of November 9, 2009 were terminated as of November 9, 2009 pursuant to our reorganization proceedings. | |
(2) | An installment of 34% of the common units subject to the options will vest and become exercisable on December 8, 2010, an additional 9% of the options vest on the completion of the next period of three months, an additional 8% of the options vest upon the completion of each of the next three-month periods, an additional 9% of the options vest upon the completion of the next quarter, and an additional 8% of the options vest upon the completion of each of the next three quarters. | |
(3) | The restrictions on the common units lapse on December 8, 2010 as to 33% of the total amount of restricted common units originally awarded and on December 8, 2011 as to 33% of the total amount of restricted common units originally awarded. | |
(4) | During fiscal year 2009, there was no established public trading market for our outstanding common equity. The reported value represents the product of multiplying the number of unvested restricted units by the value of our common units of $0.79 as of December 31, 2009, the last day of our fiscal year. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Accounting for Unit-based Compensation” for a description of how we valued our common units while as a private company. |
Option Exercises and Unit Vested at Fiscal Year End 2009(1) | ||||||||
Number of | ||||||||
Units | ||||||||
Acquired on | Value Realized | |||||||
Vesting | on Vesting | |||||||
Name | (#)(2) | ($)(3) | ||||||
Sang Park | 761,600 | 601,664 | ||||||
Tae Young Hwang | 285,600 | 225,624 | ||||||
Brent Rowe | 190,400 | 150,416 | ||||||
John McFarland | 114,240 | 90,250 | ||||||
Margaret Sakai | 114,240 | 90,250 |
(1) | All of our outstanding common and preferred units and outstanding options as of November 9, 2009 were terminated as of November 9, 2009 pursuant to our reorganization proceedings. |
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(2) | The restrictions on the awards lapsed on December 8, 2009 as to 34% of the total number of restricted common units originally awarded. | |
(3) | During fiscal year 2009, there was no established public trading market for our outstanding common equity. The reported value represents the product of multiplying the number of vested units by the value of our units of $0.79 as of the date of vesting. |
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• | any accrued benefits that were earned and payable as of December 31, 2009, including any short-term cash incentive amounts earned by, or any discretionary bonus amounts payable to, the executive officer for 2009 performance; or | |
• | payments and benefits to the extent they are provided generally to all salaried employees and do not discriminate in scope, terms or operation in favor of the named executive officers. |
Cash | Value of | |||||||||||||||||||
Severance | Continuation | Equity Award | ||||||||||||||||||
Payment | of Benefits | Acceleration | Total | |||||||||||||||||
Name | Event | ($)(1) | ($)(2) | ($)(3) | ($) | |||||||||||||||
Sang Park | (a | )(4) | 450,000 | 314,785 | (5) | 583,968 | 1,348,753 | |||||||||||||
(b | )(4) | 900,000 | 629,570 | (6) | 1,167,936 | 2,697,506 | ||||||||||||||
(c | ) | — | — | 1,167,936 | 1,167,936 | |||||||||||||||
Tae Young Hwang | (c | ) | — | — | 437,976 | 437,976 | ||||||||||||||
Brent Rowe | (a | ) | 110,000 | — | — | 110,000 | ||||||||||||||
(c | ) | — | — | 291,984 | 291,984 | |||||||||||||||
Margaret Sakai | (a | ) | 130,000 | 81,834 | (7) | — | 211,834 | |||||||||||||
(c | ) | — | — | 175,190 | 175,190 | |||||||||||||||
John McFarland | (a | ) | 94,210 | 49,808 | (8) | — | 144,018 | |||||||||||||
(c | ) | — | — | 175,190 | 175,190 |
(a) | Termination without cause in absence of change in control | |
(b) | Termination without cause within 9 months following a change in control | |
(c) | Change in control | |
(1) | Represents cash severance payments payable to our named executive officers pursuant to our employment agreements with them, prior to giving effect to the terms thereof relating to the Employee Retirement Benefit Security Act of Korea. Other than Mr. Rowe, who is entitled to a lump sum cash severance payment, cash severance payments are paid monthly in accordance with our regular payroll procedures. |
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Pursuant to the Employee Retirement Benefit Security Act, Mr. Hwang, Ms. Sakai and Mr. McFarland are entitled to certain statutory severance benefits from us upon the termination of their employment with us for any reason. See “Management — Compensation Discussion and Analysis �� Perquisites and Other Benefits” for additional information. For these executives, the amounts reflected in this column would be reduced to the extent we are obligated to make these statutory severance payments. | ||
(2) | Calculated assuming the continuation of benefits for the applicable period at the same dollar value of 2009 benefits. | |
(3) | Reflects the aggregate value of the accelerated vesting of the named executive officer’s unvested options and restricted common units, as applicable. | |
Because all of our options outstanding as of December 31, 2009 have an exercise price greater than the fair market value of our common units of $0.79 as of December 31, 2009, no additional value is represented by the acceleration of outstanding unvested common units subject to such awards and therefore, the value of accelerated vesting of unvested options is $0.00. | ||
Because all of our restricted common units issued under the 2009 Plan outstanding as of December 31, 2009 were issued without any required monetary payment, the amounts were calculated by multiplying (i) the number of outstanding restricted common units subject to award vesting on December 31, 2009 by (ii) the fair market value of our common units of $0.79 as of December 31, 2009. | ||
(4) | Reflected benefits are also payable in connection with Mr. Park’s resignation for good reason. See “Management — Agreements with Executives and Potential Payments Upon Termination or Change in Control — Sang Park.” | |
(5) | Represents the aggregate value of the continuation of health insurance benefits for Mr. Park and his eligible dependents for twelve months following the date of termination. Mr. Park is also entitled to tax equalization benefits, tax preparation services, the reimbursement of costs associated with one home leave flight and, for a period of twelve months post-termination, international health insurance benefits, paid housing and the use of a car and a driver. | |
(6) | Represents the aggregate value of the continuation of health insurance benefits for Mr. Park and his eligible dependents for twenty-four months following the date of termination. Mr. Park is also entitled to tax equalization benefits, tax preparation services, the reimbursement of costs associated with two home leave flights and, for a period of twenty-four months post-termination, international health insurance benefits, paid housing and the use of a car and a driver. | |
(7) | Represents the aggregate value of the continuation of health insurance benefits for Ms. Sakai and her eligible dependents for six months following the date of termination. Ms. Sakai is also entitled to tax equalization benefits, tax preparation services, reimbursement of costs associated with one home leave flight and, for a period of six months post-termination, paid housing, the use of a car and a driver and child tuition benefits. | |
(8) | Represents the aggregate value of continuation of health insurance benefits for Mr. McFarland and his eligible dependents for six months following the date of termination. Mr. McFarland is also entitled to tax equalization, tax preparation services and, for a period of six months post-termination, child tuition benefits. |
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Number of | Present | Payments | ||||||||||||
Years of | Value of | During | ||||||||||||
Credited | Accumulated | the Last | ||||||||||||
Name | Plan Name | Service (#) | Benefit ($) | Fiscal Year | ||||||||||
Tae Young Hwang | Statutory Severance with Multiplier for Partial Period | 14 | (1) | 686,058 | — | |||||||||
Margaret Sakai | Statutory Severance | 3 | 68,155 | — | ||||||||||
John McFarland | Statutory Severance | 5 | 81,129 | — |
(1) | Mr. Hwang accrued severance for his fourteen years of service at MagnaChip and its predecessor corporation. Although the minimum legal severance accrual is one month of base salary per year of service, Mr. Hwang was eligible for accrual of a multiple of two to three months of base salary per year of service during approximately the first ten of his fourteen years of service, or $389,867 in aggregate. |
Fees | ||||||||||||||||
Earned | ||||||||||||||||
or Paid | Option | All Other | ||||||||||||||
in Cash | Awards | Compensation | Total | |||||||||||||
Name | ($) | ($)(1) | ($) | ($) | ||||||||||||
Jerry M. Baker(2)(3) | 50,000 | — | 25,751 | (4) | 75,751 | |||||||||||
Armando Geday(2)(3) | 50,000 | — | — | 50,000 | ||||||||||||
Michael Elkins(5) | — | — | — | — | ||||||||||||
Randal Klein(5) | — | — | — | — | ||||||||||||
Steven Tan(5) | — | — | — | — | ||||||||||||
Nader Tavakoli(5) | — | — | — | — |
(1) | All of our common and preferred units and outstanding options, including grants made to our directors outstanding prior to the effective date of our Chapter 11 reorganization of November 9, 2009, were terminated as of such date pursuant to our reorganization proceedings. | |
(2) | Resigned as a director effective November 9, 2009. | |
(3) | Consists of annual retainer of $50,000 paid to non-employee directors prior to our reorganization proceedings. | |
(4) | Represents payments for insurance premiums. |
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(5) | Each of our non-employee directors appointed to our board of directors subsequent to the effective date of our Chapter 11 reorganization did not receive any compensation in 2009. |
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Amount and | ||||||||
Nature of | ||||||||
Beneficial | Percent of | |||||||
Name and Address of Beneficial Owner | Ownership(1) | Class(1) | ||||||
Principal Unitholders | ||||||||
Funds managed by Avenue Capital Management II, L.P(2) | 218,927,386 | 70.2 | % | |||||
Funds and accounts managed by Southpaw Asset Management LP(3) | 23,555,229 | 7.7 | % | |||||
Tennenbaum Multi-Strategy Fund SPV (Cayman) Ltd.(4) | 20,710,045 | 6.7 | % | |||||
Directors and Executive Officers | ||||||||
Sang Park(5) | 2,240,000 | * | ||||||
Tae Young Hwang(6) | 840,000 | * | ||||||
Brent Rowe(7) | 560,000 | * | ||||||
Margaret Sakai(8) | 336,000 | * | ||||||
John McFarland(9) | 336,000 | * | ||||||
Michael Elkins(10) | — | — | ||||||
Randal Klein(10) | — | — | ||||||
Steven Tan(10) | — | — | ||||||
Nader Tavakoli(11) | 150,000 | * | ||||||
R. Douglas Norby | — | — | ||||||
Gidu Shroff | — | — | ||||||
Robert Krakauer(12) | — | — | ||||||
Directors and executive officers as a group (13 persons)(13) | 4,910,000 | 1.6 | % |
* | Less than one percent. | |
(1) | Includes any outstanding common units held and, to the extent applicable, units issuable upon the exercise or conversion of any securities that are exercisable or convertible within 60 days of June 30, 2010. |
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(2) | The following entities and person are collectively referred to in this table as the “Avenue Capital Group”: (i) Avenue Investments, L.P. (“Avenue Investments”), (ii) Avenue International Master, L.P. (“Avenue International Master”), (iii) Avenue International, Ltd. (“Avenue International”), the sole limited partner of Avenue International Master, (iv) Avenue International Master GenPar, Ltd. (“Avenue International GenPar”), the general partner of Avenue International Master, (v) Avenue Partners, LLC (“Avenue Partners”), the general partner of Avenue Investments and the sole shareholder of Avenue International GenPar, (vi) Avenue-CDP Global Opportunities Fund, L.P. (“CDP Global”), (vii) Avenue Global Opportunities Fund GenPar, LLC (“CDP Global GenPar”), the general partner of CDP Global, (viii) Avenue Special Situations Fund IV, L.P. (“Avenue Fund IV”), (ix) Avenue Capital Partners IV, LLC (“Avenue Capital IV”), the general partner of Avenue Fund IV, (x) GL Partners IV, LLC (“GL IV”), the managing member of Avenue Capital IV, (xi) Avenue Special Situations Fund V, L.P. (“Avenue Fund V”), (xii) Avenue Capital Partners V, LLC (“Avenue Capital V”), the general partner of Avenue Fund V, (xiii) GL Partners V, LLC (“GL V”), the managing member of Avenue Capital V, (xiv) Avenue Capital Management II, L.P. (“Avenue Capital II”), the investment advisor to Avenue Investments, Avenue International Master, CDP Global, Avenue Fund IV and Avenue Fund V (collectively, the “Avenue Funds”), (xv) Avenue Capital Management II GenPar, LLC (“GenPar”), the general partner of Avenue Capital II, and (xvi) Marc Lasry, the managing member of GenPar, GL V, GL IV, CDP Global GenPar and Avenue Partners and a director of Avenue International GenPar. | |
The Avenue Capital Group beneficially owns 218,927,386 common units, including the 4,447,680 common units the Avenue Capital Group may receive through the exercise of outstanding warrants. | ||
The Avenue Funds have the sole power to vote and dispose of the common units held by them. Avenue International, Avenue International GenPar, Avenue Partners, CDP Global GenPar, Avenue Capital IV, GL IV, Avenue Capital V, GL V, Avenue Capital II, GenPar and Marc Lasry have the shared power to vote and dispose of the common units held by the Avenue Funds, all of whom disclaim any beneficial ownership except to the extent of their respective pecuniary interest. The address for all of the Avenue Funds is 535 Madison Avenue, New York, NY 10022. | ||
Avenue Fund V beneficially owns 88,938,119 common units, or 28.7%, which represents 86,756,399 common units and 2,181,720 common units issuable upon the exercise of warrants held by Avenue Fund V. The securities owned by Avenue Fund V may also be deemed to be beneficially owned by Avenue Capital V, its general partner; GL V, the managing member of Avenue Capital V; Avenue Capital II, its investment adviser; GenPar, the general partner of Avenue Capital II; and Mr. Lasry, the managing member of GenPar and GL V; all of whom disclaim any beneficial ownership except to the extent of their respective pecuniary interest. For further information regarding Avenue Fund V, please see above. | ||
Avenue Fund IV beneficially owns 70,458,255 common units, or 22.8%, which represents 69,186,975 common units and 1,271,280 common units issuable upon the exercise of warrants held by Avenue Fund IV. The securities owned by Avenue Fund IV may also be deemed to be beneficially owned by Avenue Capital IV, its general partner; GL IV, the managing member of Avenue Capital IV; Avenue Capital II, its investment adviser; GenPar, the general partner of Avenue Capital II; and Mr. Lasry, the managing member of GenPar and GL IV; all of whom disclaim any beneficial ownership except to the extent of their respective pecuniary interest. For further information regarding Avenue Fund IV, please see above. | ||
Avenue International Master beneficially owns 35,568,286 common units, or 11.6%, which represents 35,004,706 common units and 563,580 common units issuable upon the exercise of warrants held by Avenue International Master. The securities owned by Avenue International Master may also be deemed to be beneficially owned by Avenue International, its sole limited partner; Avenue International GenPar, its general partner; Avenue Partners, the sole shareholder of Avenue International GenPar; Avenue Capital II, its investment adviser; GenPar, the general |
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partner of Avenue Capital II; and Mr. Lasry, the managing member of GenPar and Avenue Partners and a director of Avenue International GenPar; all of whom disclaim any beneficial ownership except to the extent of their respective pecuniary interest. For further information regarding Avenue International Master, please see above. | ||
CDP Global beneficially owns 12,104,679 common units, or 3.9%, which represents 11,862,159 common units and 242,520 common units issuable upon the exercise of warrants held by CDP Global. The securities owned by CDP Global may also be deemed to be beneficially owned by CDP Global GenPar, its general partner; Avenue Capital II, its investment adviser; GenPar, the general partner of Avenue Capital II; and Mr. Lasry, the managing member of GenPar and CDP Global GenPar; all of whom disclaim any beneficial ownership except to the extent of their respective pecuniary interest. For further information regarding CDP Global, please see above. | ||
Avenue Investments beneficially owns 11,858,047 common units, or 3.9%, which represents 11,669,467 common units and 188,580 common units issuable upon the exercise of warrants held by Avenue Investments. The securities owned by Avenue Investments may also be deemed to be beneficially owned by Avenue Partners, its general partner; Avenue Capital II, its investment adviser; GenPar, the general partner of Avenue Capital II; and Mr. Lasry, the managing member of GenPar and Avenue Partners; all of whom disclaim any beneficial ownership except to the extent of their respective pecuniary interest. For further information regarding Avenue Investments, please see above. | ||
(3) | Represents 23,555,229 common units that may be deemed to be beneficially owned by Southpaw Asset Management LP (“Southpaw Management”) as it serves as the discretionary investment manager for several funds and accounts (the “Managed Accounts”). The securities beneficially owned by Southpaw Management may be deemed beneficially owned by Southpaw Holdings LLC (“Southpaw Holdings”), which is the general partner of Southpaw Management, and by each of Kevin Wyman and Howard Golden, who are principals of Southpaw Holdings. | |
Southpaw Credit Opportunity Master Fund, L.P (“Southpaw Master Fund”) beneficially owns 22,885,269 common units. The securities owned by Southpaw Master Fund may also be deemed beneficially owned by Southpaw Management, in its capacity as the investment manager of Southpaw Master Fund, and Southpaw GP LLC (“Southpaw GP”), in its capacity as general partner of Southpaw Master Fund. The securities deemed beneficially owned by Southpaw Management may also be deemed beneficially owned by Southpaw Holdings, which is the general partner of Southpaw Management, and by each of Kevin Wyman and Howard Golden, who are principals of Southpaw Holdings and Southpaw GP. | ||
The business address of each of Southpaw Master Fund, Southpaw Management, Southpaw GP, Southpaw Holdings, and Messrs. Wyman and Golden is 2 Greenwich Office Park, 1st floor, Greenwich, CT 06831. For the avoidance of doubt, none of Southpaw Management, Southpaw GP, Southpaw Holdings, or Messrs. Wyman and Golden hold common units for their personal accounts, and each reports beneficial ownership of the securities held by Southpaw Master Fund and the Managed Accounts due solely to the fact that such persons have the ability to voteand/or dispose of the securities held by Southpaw Master Fund and the Managed Accounts. | ||
(4) | Represents 20,710,045 common units held by Tennenbaum Multi-Strategy Fund SPV (Cayman) Ltd. (“Tennenbaum Cayman SPV”). Tennenbaum Capital Partners, LLC is the investment manager of Tennenbaum Cayman SPV, and may be deemed to be the beneficial owner of the securities held by such principal unitholder. Tennenbaum Capital Partners, LLC, however, disclaims beneficial ownership of these securities, except to the extent of its pecuniary interest therein. The address for Tennenbaum Cayman SPV is 2951 28th Street, Suite 1000, Santa Monica, CA 90405. | |
(5) | Represents 2,240,000 common units, of which 1,478,400 are subject to a right of repurchase by MagnaChip. |
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(6) | Represents 840,000 common units, of which 554,400 are subject to a right of repurchase by MagnaChip. | |
(7) | Represents 560,000 common units, of which 369,600 are subject to a right of repurchase by MagnaChip. | |
(8) | Represents 336,000 common units, of which 221,760 are subject to a right of repurchase by MagnaChip. | |
(9) | Represents 336,000 common units, of which 221,760 are subject to a right of repurchase by MagnaChip. | |
(10) | The address for Messrs. Elkins, Klein and Tan is 535 Madison Avenue, New York, NY 10022. | |
(11) | Represents 150,000 common units. | |
(12) | Mr. Krakauer resigned as our President, Chief Financial Officer and director on April 10, 2009. | |
(13) | Represents 4,910,000 common units, of which 3,141,600 are subject to a right of repurchase by MagnaChip. |
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• | will be general unsecured obligations of the Issuers; | |
• | will bepari passuin right of payment with all existing and future unsecured Indebtedness and other liabilities (including trade payables) of the Issuers; | |
• | will be senior in right of payment to any future subordinated Indebtedness of the Issuers (if any); and | |
• | will be unconditionally guaranteed by the Guarantors. |
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• | will be a general unsecured obligation of the Guarantor; | |
• | will bepari passuin right of payment with all existing and future unsecured Indebtedness and other liabilities (including trade payables) of that Guarantor; | |
• | will be senior in right of payment to any future subordinated Indebtedness of that Guarantor (if any); and | |
• | will be effectively subordinated in right of payment to all future secured Indebtedness of that Guarantor (if any) to the extent of the value of the collateral securing such Indebtedness. |
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Year | Percentage | |||
2014 | 105.250 | % | ||
2015 | 102.625 | % | ||
2016 and thereafter | 100.000 | % |
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• | we fail to file any of the registration statements required by the notes registration rights agreement on or before the date specified for such filing; | |
• | any of such registration statements is not declared effective by the SEC on or prior to the date specified for such effectiveness; |
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• | we fail to consummate the exchange offer within 30 business days of the commencement of the exchange offer with respect to the exchange offer registration statement; or | |
• | the shelf registration statement or the exchange offer registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales of transfer restricted securities during the periods specified in the notes registration rights agreement. |
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• | it is not our affiliate as defined in Rule 405 of the Securities Act, or if it is such an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; | |
• | it is not engaged in and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the new notes; | |
• | it is acquiring the new notes in its ordinary course of business; | |
• | if it is a broker-dealer that holds old notes that were acquired for its own account as a result of market-making activities or other trading activities (other than old notes acquired directly from the us or our affiliates), it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the new notes; | |
• | if it is a broker-dealer, it did not purchase the old notes to be exchanged in the exchange offer from us or our affiliates; | |
• | it is not acting on behalf of any person who could not truthfully and completely make the representations contained in the foregoing clauses. |
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• | to delay accepting any notes, to extend the exchange offer or, if any of the conditions set forth under “Conditions to the Exchange Offer” shall not have been satisfied, to terminate the exchange offer, by giving oral or written notice of that delay, extension or termination to the exchange agent; | |
• | to extend the exchange offer or, if any of the conditions set forth under “Conditions to the Exchange Offer” shall not have been satisfied, to terminate the exchange offer, by giving oral or written notice of that extension or termination to the exchange agent; or | |
• | to amend the terms of the exchange offer in any manner; however, in the event of a material change in the offer, including the waiver of a material condition, we will extend the offer so that at least five business days remain in the offer following notice of the material change. |
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• | the exchange agent must receive certificates for such old notes along with the letter of transmittal; or | |
• | the exchange agent must receive, on or prior to the expiration date, a timely confirmation of a book-entry transfer, which we refer to as a “book-entry confirmation,” of such old notes into the exchange agent’s account at DTC pursuant to the book-entry transfer procedure described below under the caption “Book-Entry Transfer;” or | |
• | the holder must comply with the guaranteed delivery procedures described below. |
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• | the tender is made by or through an eligible institution; | |
• | a properly completed and duly executed notice of guaranteed delivery, substantially in the form made available by us, is received by the exchange agent on or prior to the expiration date and such documents set forth the name and address of the holder of old notes and the amount of old notes tendered and stating that the tender is being made by guaranteed delivery and guaranteeing that within three New York Stock Exchange trading days after the date of |
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execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, will be deposited by the eligible institution with the exchange agent; and |
• | the certificates (or a book-entry confirmation) representing all tendered old notes, in proper form for transfer, together with a letter of transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an agent’s message in lieu thereof, and any other documents required by the letter of transmittal are received by the exchange agent within three New York Stock Exchange trading days after the date of execution of such notice of guaranteed delivery. |
• | there is threatened, instituted or pending any action or proceeding before, or any injunction, order or decree issued by, any court or governmental agency or other governmental regulatory or administrative agency or commission: |
• | any action has been taken, proposed or threatened by any governmental authority, domestic or foreign, that in our sole judgment might directly or indirectly result in any of the consequences referred to in clause (1), (2) or (3) above or, in our sole judgment, might result in the holders of new notes having obligations with respect to resales and transfers of new notes which are greater than those described in the interpretations by the staff of the SEC discussed above, or would otherwise make it inadvisable to proceed with the exchange offer; or | |
• | there has occurred: |
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• | any change, or any development involving a prospective change, has occurred or been threatened in our business, financial condition, operations or prospects and those of our subsidiaries taken as a whole that is or may be adverse to us, or we have become aware of facts that have or may have an adverse impact on the value of the old notes or the new notes, which, in our sole judgment, in any case makes it inadvisable to proceed with the exchange offer or with acceptance for exchange or exchange of some or all of the old notes; or | |
• | there has occurred a change in the interpretations by the staff of the SEC which permits the new notes issued pursuant to the exchange offer in exchange for old notes to be offered for resale, resold and otherwise transferred by holders thereof (other than broker-dealers and any such holder which is our affiliate within the meaning of Rule 405 promulgated under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such new notes are acquired in the ordinary course of such holders’ business and such holders have no arrangement or understanding with any person to participate in the distribution of such new notes; or | |
• | any law, statute, rule or regulation has been adopted or enacted which, in our judgment, would reasonably be expected to impair our ability to proceed with the exchange offer; or | |
• | a stop order has been issued by the SEC or any state securities authority suspending the effectiveness of the registration statement of which this prospectus forms a part, or proceedings have been initiated or, to our knowledge, threatened for that purpose, or any governmental approval has not been obtained, which approval we shall, in our sole discretion, deem necessary for the consummation of the exchange offer as contemplated hereby (we are required to use commercially reasonable efforts to obtain the withdrawal of any stop order); or | |
• | we have received an opinion of counsel experienced in such matters to the effect that there exists any actual or threatened legal impediment (including a default or prospective default under an agreement, indenture or other instrument or obligation to which we are a party or by which we are bound) to the consummation of the transactions contemplated by the exchange offer. |
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By registered mail or | By regular mail or | |||
certified mail: | overnight courier: | By hand: | ||
Wilmington Trust FSB | Wilmington Trust FSB | Wilmington Trust FSB | ||
c/o Wilmington Trust Company | c/o Wilmington Trust Company | c/o Wilmington Trust Company | ||
Rodney Square North | Rodney Square North | Rodney Square North | ||
1100 North Market Street | 1100 North Market Street | 1100 North Market Street | ||
Wilmington, DE19890-1626 | Wilmington, DE 19890-1626 | Wilmington, DE 19890-1626 | ||
Attention: Sam Hamed | Attention: Sam Hamed | Attention: Sam Hamed |
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• | to us or our subsidiaries; | |
• | pursuant to an effective registration statement under the Securities Act; | |
• | to a qualified institutional buyer in compliance with Rule 144A under the Securities Act; | |
• | pursuant to offers or sales tonon-U.S. Persons that occur outside the United States within the meaning of Regulation S under the Securities Act; | |
• | to an institutional “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that, prior to such transfer, furnishes to the Trustee a signed letter containing certain representations and agreements relating to the restrictions on transfer of the old notes (the form of which letter may be obtained from the Trustee) and, if the aggregate principal amount of such old notes at the time of transfer is less than $250,000, an opinion of counsel acceptable to us that such transfer is in compliance with the Securities Act; or | |
• | pursuant to another available exemption from the registration requirements of the Securities Act. |
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• | We will not receive any proceeds from any sale of new notes by broker-dealers. | |
• | New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in theover-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices, or at negotiated prices. | |
• | Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any of the new notes. | |
• | Any broker-dealer that resells new notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of the new notes may be deemed to be an “underwriter” within the meaning of the Securities Act, and any profit on any such resale of new notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. | |
• | The letter of transmittal states that, by acknowledging that it will deliver a prospectus and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. |
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F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
Consolidated financial statements (audited) | ||||
F-24 | ||||
F-26 | ||||
F-27 | ||||
F-28 | ||||
F-29 | ||||
F-30 |
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Successor | ||||||||||||
December 31, | ||||||||||||
March 31, 2010 | 2009 | |||||||||||
Pro Forma | ||||||||||||
Historical | (Note 20) | Historical | ||||||||||
(Unaudited; in thousands of US dollars, except unit data) | ||||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 82,688 | $ | 82,688 | $ | 64,925 | ||||||
Accounts receivable, net | 104,514 | 104,514 | 74,233 | |||||||||
Inventories, net | 58,233 | 58,233 | 63,407 | |||||||||
Other receivables | 4,507 | 4,507 | 3,433 | |||||||||
Prepaid expenses | 13,013 | 13,013 | 12,625 | |||||||||
Other current assets | 7,769 | 7,769 | 3,433 | |||||||||
Total current assets | 270,724 | 270,724 | 222,056 | |||||||||
Property, plant and equipment, net | 154,719 | 154,719 | 156,337 | |||||||||
Intangible assets, net | 43,525 | 43,525 | 50,158 | |||||||||
Long-term prepaid expenses | 9,797 | 9,797 | 10,542 | |||||||||
Other non-current assets | 13,266 | 13,266 | 14,238 | |||||||||
Total assets | $ | 492,031 | $ | 492,031 | $ | 453,331 | ||||||
LIABILITIES AND UNITHOLDERS’ EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 77,871 | $ | 77,871 | $ | 59,705 | ||||||
Other accounts payable | 7,551 | 7,551 | 7,190 | |||||||||
Payable to unitholders | — | 130,697 | — | |||||||||
Accrued expenses | 25,267 | 25,267 | 22,114 | |||||||||
Current portion of long-term debt | 618 | 618 | 618 | |||||||||
Other current liabilities | 4,552 | 4,552 | 3,937 | |||||||||
Total current liabilities | 115,859 | 246,556 | 93,564 | |||||||||
Long-term borrowings | 60,978 | 60,978 | 61,132 | |||||||||
Accrued severance benefits, net | 76,843 | 76,843 | 72,409 | |||||||||
Other non-current liabilities | 6,906 | 6,906 | 10,536 | |||||||||
Total liabilities | 260,586 | 391,283 | 237,641 | |||||||||
Unitholders’ equity | ||||||||||||
Common units, no par value, 375,000,000 units authorized, 307,233,996 and 307,083,996 units issued and outstanding at March 31, 2010 and December 31, 2009, respectively | 55,453 | 55,453 | 55,135 | |||||||||
Additional paid-in capital | 169,265 | 38,568 | 168,700 | |||||||||
Retained earnings | 29,138 | 29,138 | (1,963 | ) | ||||||||
Accumulated other comprehensive loss | (22,411 | ) | (22,411 | ) | (6,182 | ) | ||||||
Total unitholders’ equity | 231,445 | 100,748 | 215,690 | |||||||||
Total liabilities and unitholders’ equity | $ | 492,031 | $ | 492,031 | $ | 453,331 | ||||||
F-2
Table of Contents
Three Months Ended | |||||||||
Successor | Predecessor | ||||||||
March 31, 2010 | March 29, 2009 | ||||||||
(Unaudited; in thousands of | |||||||||
US dollars, except unit data) | |||||||||
Net sales | $ | 179,485 | $ | 101,459 | |||||
Cost of sales | 130,127 | 80,560 | |||||||
Gross profit | 49,358 | 20,899 | |||||||
Selling, general and administrative expenses | 17,908 | 15,283 | |||||||
Research and development expenses | 20,531 | 16,986 | |||||||
Restructuring and impairment charges | 336 | 54 | |||||||
Operating income (loss) from continuing operations | 10,583 | (11,424 | ) | ||||||
Other income (expenses) | |||||||||
Interest expense, net | (2,049 | ) | (14,654 | ) | |||||
Foreign currency gain (loss), net | 21,616 | (40,211 | ) | ||||||
Others | (52 | ) | — | ||||||
19,515 | (54,865 | ) | |||||||
Income (loss) from continuing operations before income taxes | 30,098 | (66,289 | ) | ||||||
Income tax expenses (benefits) | (1,003 | ) | 2,618 | ||||||
Income (loss) from continuing operations | 31,101 | (68,907 | ) | ||||||
Loss from discontinued operations, net of taxes | — | (785 | ) | ||||||
Net income (loss) | $ | 31,101 | $ | (69,692 | ) | ||||
Dividends accrued on preferred units | — | 3,369 | |||||||
Income (loss) from continuing operations attributable to common units | $ | 31,101 | $ | (72,276 | ) | ||||
Net income (loss) attributable to common units | $ | 31,101 | $ | (73,061 | ) | ||||
Earnings (loss) per common unit from continuing operations — Basic and diluted | $ | 0.10 | $ | (1.37 | ) | ||||
Loss per common unit from discontinued operations — Basic and diluted | $ | — | $ | (0.01 | ) | ||||
Earnings (loss) per common unit — Basic and diluted | $ | 0.10 | $ | (1.38 | ) | ||||
Weighted average number of units — Basic | 302,443,556 | 52,923,483 | |||||||
Weighted average number of units — Diluted | 307,535,928 | 52,923,483 |
F-3
Table of Contents
Retained | Accumulated | |||||||||||||||||||||||
Additional | Earnings | Other | ||||||||||||||||||||||
Common Units | Paid-In | (Accumulated | Comprehensive | |||||||||||||||||||||
Units | Amount | Capital | Deficit) | Income (Loss) | Total | |||||||||||||||||||
(Unaudited; in thousands of US dollars, except unit data) | ||||||||||||||||||||||||
Three Months Ended March 31, 2010 | ||||||||||||||||||||||||
Balance at January 1, 2010 | 307,083,996 | $ | 55,135 | $ | 168,700 | $ | (1,963 | ) | $ | (6,182 | ) | $ | 215,690 | |||||||||||
(Successor Company) | ||||||||||||||||||||||||
Unit-based compensation | 150,000 | 318 | 565 | — | — | 883 | ||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||
Net income | — | — | — | 31,101 | — | 31,101 | ||||||||||||||||||
Fair valuation of derivatives | — | — | — | — | (1,434 | ) | (1,434 | ) | ||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (14,907 | ) | (14,907 | ) | ||||||||||||||||
Unrealized gains on investments | — | — | — | — | 112 | 112 | ||||||||||||||||||
Total comprehensive income | 14,872 | |||||||||||||||||||||||
Balance at March 31, 2010 | 307,233,996 | $ | 55,453 | $ | 169,265 | $ | 29,138 | $ | (22,411 | ) | $ | 231,445 | ||||||||||||
Three Months Ended March 29, 2009 | ||||||||||||||||||||||||
Balance at January 1, 2009 | 52,923,483 | 52,923 | 3,150 | (995,007 | ) | 151,135 | (787,799 | ) | ||||||||||||||||
(Predecessor Company) | ||||||||||||||||||||||||
Unit-based compensation | — | — | 111 | — | — | 111 | ||||||||||||||||||
Dividends accrued on preferred units | — | — | — | (3,369 | ) | — | (3,369 | ) | ||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||
Net loss | — | — | — | (69,692 | ) | — | (69,692 | ) | ||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 25,679 | 25,679 | ||||||||||||||||||
Total comprehensive loss | (44,013 | ) | ||||||||||||||||||||||
Balance at March 29, 2009 | 52,923,483 | $ | 52,923 | $ | 3,261 | $ | (1,068,068 | ) | $ | 176,814 | $ | (835,070 | ) | |||||||||||
(Predecessor Company) |
F-4
Table of Contents
Three Months Ended | |||||||||
Successor | Predecessor | ||||||||
March 31, | March 29, | ||||||||
2010 | 2009 | ||||||||
(Unaudited; in thousands of US dollars) | |||||||||
Cash flows from operating activities | |||||||||
Net income (loss) | $ | 31,101 | $ | (69,692 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||||||||
Depreciation and amortization | 15,477 | 10,413 | |||||||
Provision for severance benefits | 3,166 | 989 | |||||||
Amortization of debt issuance costs | 25 | 243 | |||||||
Loss (gain) on foreign currency translation, net | (23,478 | ) | 41,433 | ||||||
Loss (gain) on disposal of property, plant and equipment, net | (9 | ) | 314 | ||||||
Loss on disposal of intangible assets, net | 2 | 44 | |||||||
Restructuring and impairment charges | 336 | — | |||||||
Unit-based compensation | 1,473 | 111 | |||||||
Cash used for reorganization items | 1,579 | — | |||||||
Other | 393 | 530 | |||||||
Changes in operating assets and liabilities | |||||||||
Accounts receivable | (29,684 | ) | (10,682 | ) | |||||
Inventories | 7,206 | 11,805 | |||||||
Other receivables | (1,238 | ) | 1,135 | ||||||
Deferred tax assets | 264 | 398 | |||||||
Accounts payable | 18,088 | 2,118 | |||||||
Other accounts payable | (1,612 | ) | (901 | ) | |||||
Accrued expenses | 3,196 | 15,575 | |||||||
Long term other payable | (2,136 | ) | 406 | ||||||
Other current assets | (3,659 | ) | (2,011 | ) | |||||
Other current liabilities | (2,107 | ) | (112 | ) | |||||
Payment of severance benefits | (1,092 | ) | (1,686 | ) | |||||
Other | (788 | ) | (151 | ) | |||||
Net cash provided by operating activities before reorganization items | 16,503 | 279 | |||||||
Cash used for reorganization items | (1,579 | ) | — | ||||||
Net cash provided by operating activities | 14,924 | 279 | |||||||
Cash flows from investing activities | |||||||||
Proceeds from disposal of plant, property and equipment | 4 | 19 | |||||||
Proceeds from disposal of intangible assets | 27 | — | |||||||
Purchase of plant, property and equipment | (891 | ) | (1,396 | ) | |||||
Payment for intellectual property registration | (152 | ) | (90 | ) | |||||
Decrease in restricted cash | — | 4,137 | |||||||
Decrease in short-term financial instruments | 329 | — | |||||||
Decrease in guarantee deposits | 972 | 469 | |||||||
Other | (50 | ) | (3 | ) | |||||
Net cash provided by investing activities | 239 | 3,136 | |||||||
Cash flows from financing activities | |||||||||
Repayment of current portion of long-term debt | (154 | ) | — | ||||||
Net cash used in financing activities | (154 | ) | — | ||||||
Effect of exchange rates on cash and cash equivalents | 2,754 | (365 | ) | ||||||
Net increase in cash and cash equivalents | 17,763 | 3,050 | |||||||
Cash and cash equivalents | |||||||||
Beginning of the period | 64,925 | 4,037 | |||||||
End of the period | $ | 82,688 | $ | 7,087 | |||||
Supplemental cash flow information | |||||||||
Cash paid for interest | $ | 2,035 | $ | 407 | |||||
Cash paid for income taxes | $ | 1,513 | $ | 2,900 | |||||
F-5
Table of Contents
1. | General |
2. | Voluntary Reorganization under Chapter 11 |
3. | Significant Accounting Policies |
F-6
Table of Contents
F-7
Table of Contents
4. | Inventories |
Successor | ||||||||
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
Finished goods | $ | 10,818 | $ | 19,474 | ||||
Semi-finished goods andwork-in-process | 44,962 | 42,604 | ||||||
Raw materials | 6,836 | 5,844 | ||||||
Materials in-transit | 385 | 64 | ||||||
Less: inventory reserve | (4,768 | ) | (4,579 | ) | ||||
Inventories, net | $ | 58,233 | $ | 63,407 | ||||
5. | Property, Plant and Equipment |
Successor | ||||||||
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
Buildings and related structures | $ | 74,422 | $ | 72,076 | ||||
Machinery and equipment | 74,551 | 71,505 | ||||||
Vehicles and others | 3,309 | 3,043 | ||||||
152,282 | 146,624 | |||||||
Less: accumulated depreciation | (13,155 | ) | (5,388 | ) | ||||
Land | 15,592 | 15,101 | ||||||
Property, plant and equipment, net | $ | 154,719 | $ | 156,337 | ||||
6. | Intangible Assets |
Successor | ||||||||
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
Technology | $ | 17,236 | $ | 14,942 | ||||
Customer relationships | 27,309 | 26,448 | ||||||
Intellectual property assets | 5,061 | 4,779 | ||||||
In-process research and development | 8,004 | 9,829 | ||||||
Less: accumulated amortization | (14,085 | ) | (5,840 | ) | ||||
Intangible assets, net | $ | 43,525 | $ | 50,158 | ||||
F-8
Table of Contents
7. | Derivative Financial Instruments |
Derivatives Designated as Hedging | March 31, | |||||
Instruments Under ASC 815: | 2010 | |||||
Asset Derivatives: | ||||||
Options | Other current assets | $ | 256 | |||
Liability Derivatives: | ||||||
Forwards | Other current liabilities | $ | 1,188 |
Location of | ||||||||||||||||||||
Gain (Loss) | ||||||||||||||||||||
Recognized in | Amount of | |||||||||||||||||||
Income on | Gain (Loss) | |||||||||||||||||||
Derivative | Recognized in | |||||||||||||||||||
Amount of | Location of | Amount of | (Ineffective | Income on | ||||||||||||||||
Gain (Loss) | Gain (Loss) | Gain (Loss) | Portion and | Derivatives | ||||||||||||||||
Recognized in | Reclassified from | Reclassified from | Amount | (Ineffective Portion | ||||||||||||||||
AOCI on | AOCI into | Accumulated | Excluded from | and Amount | ||||||||||||||||
Derivatives in ASC 815 Cash | Derivatives | Income | OCI into Income | Effectiveness | Excluded from | |||||||||||||||
Flow Hedging Relationships | (Effective Portion) | (Effective Portion) | (Effective Portion) | Testing) | Effectiveness Testing) | |||||||||||||||
Options | $ | (516 | ) | Net sales | $ | (17 | ) | Other income | $ | (33 | ) | |||||||||
(expenses | ) | |||||||||||||||||||
Forwards | (918 | ) | Net sales | (603 | ) | Other income | (24 | ) | ||||||||||||
(expenses | ) | |||||||||||||||||||
Total | $ | (1,434 | ) | $ | (620 | ) | $ | (57 | ) | |||||||||||
F-9
Table of Contents
8. | Fair Value Measurements |
Quoted Prices in | ||||||||||||||||||||
Fair Value | Active Markets for | Significant Other | Significant | |||||||||||||||||
Carrying Value | Measurement | Identical Asset | Observable | Unobservable | ||||||||||||||||
March 31, 2010 | March 31, 2010 | (Level 1) | Inputs (Level 2) | Inputs (Level 3) | ||||||||||||||||
Assets: | ||||||||||||||||||||
Current derivative assets | $ | 256 | $ | 256 | $ | — | $ | 256 | $ | — | ||||||||||
Available-for-sale securities | 712 | 712 | 712 | — | — | |||||||||||||||
Liabilities: | ||||||||||||||||||||
Current derivative liabilities | 1,188 | 1,188 | — | 1,188 | — |
9. | Current Portion of Long-term Debt |
F-10
Table of Contents
10. | Long-term Debt |
11. | Accrued Severance Benefits |
F-11
Table of Contents
Three Months Ended | |||||||||
Successor | Predecessor | ||||||||
March 31, | March 29, | ||||||||
2010 | 2009 | ||||||||
Beginning balance | $ | 73,646 | $ | 63,147 | |||||
Provisions | 3,166 | 989 | |||||||
Severance payments | (1,092 | ) | (1,686 | ) | |||||
Translation adjustments | 2,386 | (3,904 | ) | ||||||
78,106 | 58,546 | ||||||||
Less: cumulative contributions to the National Pension Fund | (540 | ) | (488 | ) | |||||
Group severance insurance plan | (723 | ) | (614 | ) | |||||
Accrued severance benefits, net | $ | 76,843 | $ | 57,444 | |||||
Severance Benefit | ||||
2010 | $ | 34 | ||
2011 | — | |||
2012 | 140 | |||
2013 | — | |||
2014 | 284 | |||
2015 | 433 | |||
2016 — 2020 | 11,001 |
F-12
Table of Contents
12. | Redeemable Convertible Preferred Units |
Three Months Ended | ||||||||
March 29, 2009 | ||||||||
Units | Amount | |||||||
Beginning of the period | 93,997 | $ | 142,669 | |||||
Accrual of preferred dividends | — | 3,369 | ||||||
End of the period | 93,997 | $ | 146,038 | |||||
13. | Discontinued Operations |
Three Months Ended | |||||||||
Successor | Predecessor | ||||||||
March 31, | March 29, | ||||||||
2010 | 2009 | ||||||||
Net sales | $ | — | $ | 913 | |||||
Cost of sales | — | 1,306 | |||||||
Selling, general and administrative expenses | — | 392 | |||||||
Research and development expenses | — | — | |||||||
Restructuring and impairment charges | — | — | |||||||
Income tax expenses | — | — | |||||||
Income from discontinued operations, net of taxes | $ | — | $ | (785 | ) | ||||
14. | Restructuring and Impairment Charges |
F-13
Table of Contents
15. | Uncertainty in Income Taxes |
16. | Segment Information |
Three Months Ended | |||||||||
Successor | Predecessor | ||||||||
March 31, | March 29, | ||||||||
2010 | 2009 | ||||||||
Net Sales | |||||||||
Display Solutions | $ | 76,730 | $ | 59,620 | |||||
Semiconductor Manufacturing Services | 93,201 | 40,137 | |||||||
Power Solutions | 9,034 | 933 | |||||||
All other | 520 | 769 | |||||||
Total segment net sales | $ | 179,485 | $ | 101,459 | |||||
Gross Profit | |||||||||
Display Solutions | $ | 14,431 | $ | 13,674 | |||||
Semiconductor Manufacturing Services | 32,844 | 6,177 | |||||||
Power Solutions | 1,563 | 279 | |||||||
All other | 520 | 769 | |||||||
Total segment gross profit | $ | 49,358 | $ | 20,899 | |||||
F-14
Table of Contents
17. | Commitments and Contingencies |
18. | Earnings (Loss) per Unit |
Three Months Ended | |||||||||
Successor | Predecessor | ||||||||
March 31, | March 29, | ||||||||
2010 | 2009 | ||||||||
Income (loss) from continuing operations | $ | 31,101 | $ | (68,907 | ) | ||||
Loss from discontinued operations, net of taxes | — | (785 | ) | ||||||
Net income (loss) | 31,101 | (69,692 | ) | ||||||
Dividends accrued on preferred unitholders | — | (3,369 | ) | ||||||
Income (loss) from continuing operations attributable to common units | $ | 31,101 | $ | (72,276 | ) | ||||
Net income (loss) attributable to common units | $ | 31,101 | $ | (73,061 | ) | ||||
Weighted average common units outstanding-basic | 302,443,556 | 52,923,483 | |||||||
Weighted average common units outstanding-diluted | 307,535,928 | 52,923,483 | |||||||
Basic and diluted earnings (loss) per unit from continuing operations | $ | 0.10 | $ | (1.37 | ) | ||||
Basic and diluted loss per unit from discontinued operations | $ | — | �� | $ | (0.01 | ) | |||
Basic and diluted earnings (loss) per unit | $ | 0.10 | $ | (1.38 | ) | ||||
F-15
Table of Contents
Three Months Ended | |||||||||
Successor | Predecessor | ||||||||
March 31, | March 29, | ||||||||
2010 | 2009 | ||||||||
Redeemable convertible preferred units | NA | 93,997 | |||||||
Options | 914,000 | 4,048,413 | |||||||
Warrants | 15,000,000 | — |
19. | Subsequent Events |
A. | Issuance of $250 Million of Senior Notes and Applications of Net Proceeds |
B. | Cash Flow Hedge Transactions |
F-16
Table of Contents
20. | Unaudited Pro Forma Balance Sheet as of March 31, 2010 |
21. | Condensed Consolidating Financial Information |
F-17
Table of Contents
March 31, 2010
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 76 | $ | 49 | $ | 72,367 | $ | 10,196 | $ | — | $ | 82,688 | ||||||||||||
Accounts receivable, net | — | — | 141,028 | 51,836 | (88,350 | ) | 104,514 | |||||||||||||||||
Inventories, net | — | — | 58,233 | 162 | (162 | ) | 58,233 | |||||||||||||||||
Other receivables | 710 | 718 | 12,002 | 3,277 | (12,200 | ) | 4,507 | |||||||||||||||||
Prepaid expenses | 149 | 60 | 15,320 | 381 | (2,897 | ) | 13,013 | |||||||||||||||||
Short-term intercompany loan | — | 95,000 | — | 95,000 | (190,000 | ) | — | |||||||||||||||||
Other current assets | 2,541 | 86,376 | 2,643 | 83,407 | (167,198 | ) | 7,769 | |||||||||||||||||
Total current assets | 3,476 | 182,203 | 301,593 | 244,259 | (460,807 | ) | 270,724 | |||||||||||||||||
Property, plant and equipment, net | — | — | 154,354 | 365 | — | 154,719 | ||||||||||||||||||
Intangible assets, net | — | — | 42,871 | 654 | — | 43,525 | ||||||||||||||||||
Long-term prepaid expenses | — | — | 21,116 | — | (11,319 | ) | 9,797 | |||||||||||||||||
Investment in subsidiaries | (592,868 | ) | (675,542 | ) | — | (514,435 | ) | 1,782,845 | — | |||||||||||||||
Long-term intercompany loan | 824,091 | 794,597 | — | 621,000 | (2,239,688 | ) | — | |||||||||||||||||
Other non-current assets | — | 209 | 5,667 | 7,390 | — | 13,266 | ||||||||||||||||||
Total Assets | $ | 234,699 | $ | 301,467 | $ | 525,601 | $ | 359,233 | $ | (928,969 | ) | $ | 492,031 | |||||||||||
Liabilities and Unitholders’ Equity | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 127,771 | $ | 38,408 | $ | (88,308 | ) | $ | 77,871 | |||||||||||
Other accounts payable | 3,247 | 6,487 | 7,672 | 2,345 | (12,200 | ) | 7,551 | |||||||||||||||||
Accrued expenses | 7 | 1,044 | 104,236 | 87,221 | (167,241 | ) | 25,267 | |||||||||||||||||
Short-term intercompany borrowings | — | — | 95,000 | 95,000 | (190,000 | ) | — | |||||||||||||||||
Current portion of long-term debt | — | 618 | — | — | — | 618 | ||||||||||||||||||
Other current liabilities | — | — | 3,655 | 3,794 | (2,897 | ) | 4,552 | |||||||||||||||||
Total current liabilities | 3,254 | 8,149 | 338,334 | 226,768 | (460,646 | ) | 115,859 | |||||||||||||||||
Long-term borrowings | — | 885,069 | 621,000 | 794,597 | (2,239,688 | ) | 60,978 | |||||||||||||||||
Accrued severance benefits, net | — | — | 75,717 | 1,126 | — | 76,843 | ||||||||||||||||||
Other non-current liabilities | — | 1 | 4,933 | 13,292 | (11,320 | ) | 6,906 | |||||||||||||||||
Total liabilities | 3,254 | 893,219 | 1,039,984 | 1,035,783 | (2,711,654 | ) | 260,586 | |||||||||||||||||
Unitholders’ equity | ||||||||||||||||||||||||
Common units | 55,453 | 136,229 | 39,005 | 51,976 | (227,210 | ) | 55,453 | |||||||||||||||||
Additional paid-in capital | 169,265 | (735,491 | ) | (538,726 | ) | (733,977 | ) | 2,008,194 | 169,265 | |||||||||||||||
Retained earnings | 29,138 | 29,923 | 7,010 | 27,876 | (64,809 | ) | 29,138 | |||||||||||||||||
Accumulated other comprehensive income | (22,411 | ) | (22,413 | ) | (21,672 | ) | (22,425 | ) | 66,510 | (22,411 | ) | |||||||||||||
Total unitholders’ equity | 231,445 | (591,752 | ) | (514,383 | ) | (676,550 | ) | 1,782,685 | 231,445 | |||||||||||||||
Total liabilities and unitholders’ equity | $ | 234,699 | $ | 301,467 | $ | 525,601 | $ | 359,233 | $ | (928,969 | ) | $ | 492,031 | |||||||||||
F-18
Table of Contents
December 31, 2009
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 136 | $ | 24 | $ | 45,443 | $ | 19,322 | $ | — | $ | 64,925 | ||||||||||||
Accounts receivable, net | — | — | 122,500 | 66,872 | (115,139 | ) | 74,233 | |||||||||||||||||
Inventories, net | — | — | 59,914 | 4,098 | (605 | ) | 63,407 | |||||||||||||||||
Other receivables | 710 | 718 | 7,061 | 3,617 | (8,673 | ) | 3,433 | |||||||||||||||||
Prepaid expenses | 165 | 85 | 14,122 | 1,150 | (2,897 | ) | 12,625 | |||||||||||||||||
Short-term intercompany loan | — | 95,000 | — | 95,000 | (190,000 | ) | — | |||||||||||||||||
Other current assets | 16 | 72,614 | 776 | 72,868 | (142,841 | ) | 3,433 | |||||||||||||||||
Total current assets | 1,027 | 168,441 | 249,816 | 262,927 | (460,155 | ) | 222,056 | |||||||||||||||||
Property, plant and equipment, net | — | — | 155,951 | 386 | — | 156,337 | ||||||||||||||||||
Intangible assets, net | — | — | 49,459 | 699 | — | 50,158 | ||||||||||||||||||
Long-term prepaid expenses | — | — | 22,576 | — | (12,034 | ) | 10,542 | |||||||||||||||||
Investment in subsidiaries | (608,843 | ) | (690,259 | ) | — | (517,520 | ) | 1,816,622 | — | |||||||||||||||
Long-term intercompany loan | 824,091 | 806,355 | — | 621,000 | (2,251,446 | ) | — | |||||||||||||||||
Other non-current assets | — | 234 | 5,753 | 8,251 | — | 14,238 | ||||||||||||||||||
Total Assets | $ | 216,275 | $ | 284,771 | $ | 483,555 | $ | 375,743 | $ | (907,013 | ) | $ | 453,331 | |||||||||||
Liabilities and Unitholders’ Equity | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 106,792 | $ | 67,975 | $ | (115,062 | ) | $ | 59,705 | |||||||||||
Other accounts payable | 485 | 5,551 | 6,337 | 3,490 | (8,673 | ) | 7,190 | |||||||||||||||||
Accrued expenses | 100 | 1,134 | 89,045 | 74,753 | (142,918 | ) | 22,114 | |||||||||||||||||
Short-term intercompany borrowings | — | — | 95,000 | 95,000 | (190,000 | ) | — | |||||||||||||||||
Current portion of long-term debt | — | 618 | — | — | — | 618 | ||||||||||||||||||
Other current liabilities | — | — | 2,935 | 3,899 | (2,897 | ) | 3,937 | |||||||||||||||||
Total current liabilities | 585 | 7,303 | 300,109 | 245,117 | (459,550 | ) | 93,564 | |||||||||||||||||
Long-term borrowings | — | 885,224 | 621,000 | 806,354 | (2,251,446 | ) | 61,132 | |||||||||||||||||
Accrued severance benefits, net | — | — | 71,362 | 1,047 | — | 72,409 | ||||||||||||||||||
Other non-current liabilities | — | — | 8,550 | 14,020 | (12,034 | ) | 10,536 | |||||||||||||||||
Total liabilities | 585 | 892,527 | 1,001,021 | 1,066,538 | (2,723,030 | ) | 237,641 | |||||||||||||||||
Unitholders’ equity | ||||||||||||||||||||||||
Common units | 55,135 | 136,229 | 39,005 | 51,976 | (227,210 | ) | 55,135 | |||||||||||||||||
Additional paid-in capital | 168,700 | (735,940 | ) | (539,175 | ) | (734,525 | ) | 2,009,640 | 168,700 | |||||||||||||||
Accumulated deficit | (1,963 | ) | (1,871 | ) | (11,636 | ) | (2,056 | ) | 15,563 | (1,963 | ) | |||||||||||||
Accumulated other comprehensive income | (6,182 | ) | (6,174 | ) | (5,660 | ) | (6,190 | ) | 18,024 | (6,182 | ) | |||||||||||||
Total unitholders’ equity | 215,690 | (607,756 | ) | (517,466 | ) | (690,795 | ) | 1,816,017 | 215,690 | |||||||||||||||
Total liabilities and unitholders’ equity | $ | 216,275 | $ | 284,771 | $ | 483,555 | $ | 375,743 | $ | (907,013 | ) | $ | 453,331 | |||||||||||
F-19
Table of Contents
For the three months ended March 31, 2010
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Net sales | $ | — | $ | — | $ | 174,814 | $ | 11,682 | $ | (7,011 | ) | $ | 179,485 | |||||||||||
Cost of sales | — | — | 126,504 | 5,693 | (2,070 | ) | 130,127 | |||||||||||||||||
Gross profit | — | — | 48,310 | 5,989 | (4,941 | ) | 49,358 | |||||||||||||||||
Selling, general and administrative expenses | 563 | 136 | 17,264 | 2,587 | (2,642 | ) | 17,908 | |||||||||||||||||
Research and development expenses | — | — | 21,400 | 2,170 | (3,039 | ) | 20,531 | |||||||||||||||||
Restructuring and impairment charges | — | — | 336 | — | — | 336 | ||||||||||||||||||
Operating income (loss) | (563 | ) | (136 | ) | 9,310 | 1,232 | 740 | 10,583 | ||||||||||||||||
Other income | — | 1,423 | 7,377 | 10,715 | — | 19,515 | ||||||||||||||||||
Income (loss) before income taxes, equity in earnings of related equity investment | (563 | ) | 1,287 | 16,687 | 11,947 | 740 | 30,098 | |||||||||||||||||
Income tax expenses (benefits) | — | — | (1,959 | ) | 956 | — | (1,003 | ) | ||||||||||||||||
Income (loss) before equity in earnings of related investment | (563 | ) | 1,287 | 18,646 | 10,991 | 740 | 31,101 | |||||||||||||||||
Earnings of related investment | 31,664 | 30,507 | — | 18,940 | (81,111 | ) | — | |||||||||||||||||
Net income | $ | 31,101 | $ | 31,794 | $ | 18,646 | $ | 29,931 | $ | (80,371 | ) | $ | 31,101 | |||||||||||
Net income attributable to common units | $ | 31,101 | $ | 31,794 | $ | 18,646 | $ | 29,931 | $ | (80,371 | ) | $ | 31,101 | |||||||||||
F-20
Table of Contents
For the three months ended March 29, 2009
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Net sales | $ | — | $ | — | $ | 95,826 | $ | 40,391 | $ | (34,758 | ) | $ | 101,459 | |||||||||||
Cost of sales | — | — | 79,119 | 31,930 | (30,489 | ) | 80,560 | |||||||||||||||||
Gross profit | — | — | 16,707 | 8,461 | (4,269 | ) | 20,899 | |||||||||||||||||
Selling, general and administrative expenses | 483 | 51 | 12,009 | 3,406 | (666 | ) | 15,283 | |||||||||||||||||
Research and development expenses | — | — | 17,567 | 3,505 | (4,086 | ) | 16,986 | |||||||||||||||||
Restructuring and impairment charges | — | — | — | 54 | — | 54 | ||||||||||||||||||
Operating income (loss) from continuing operations | (483 | ) | (51 | ) | (12,869 | ) | 1,496 | 483 | (11,424 | ) | ||||||||||||||
Other income (expenses) | — | (6,272 | ) | (57,086 | ) | 8,493 | — | (54,865 | ) | |||||||||||||||
Income (loss) from continuing operations before income taxes, equity in loss of related equity investment | (483 | ) | (6,323 | ) | (69,955 | ) | 9,989 | 483 | (66,289 | ) | ||||||||||||||
Income tax expenses | — | — | 26 | 2,592 | — | 2,618 | ||||||||||||||||||
�� | ||||||||||||||||||||||||
Income (loss) before equity in loss of related investment | (483 | ) | (6,323 | ) | (69,981 | ) | 7,397 | 483 | (68,907 | ) | ||||||||||||||
Loss of related investment | (69,209 | ) | (62,842 | ) | — | (70,390 | ) | 202,441 | — | |||||||||||||||
Loss from continuing operations | (69,692 | ) | (69,165 | ) | (69,981 | ) | (62,993 | ) | 202,924 | (68,907 | ) | |||||||||||||
Loss from discontinued operation, net of taxes | — | — | (509 | ) | (226 | ) | (50 | ) | (785 | ) | ||||||||||||||
Net loss | $ | (69,692 | ) | $ | (69,165 | ) | $ | (70,490 | ) | $ | (63,219 | ) | $ | 202,874 | $ | (69,692 | ) | |||||||
Dividends accrued on preferred units | 3,369 | — | — | — | — | 3,369 | ||||||||||||||||||
Loss from continuing operations attributable to common units | (73,061 | ) | (69,165 | ) | (69,981 | ) | (62,993 | ) | 202,924 | (72,276 | ) | |||||||||||||
Net loss attributable to common units | $ | (73,061 | ) | $ | (69,165 | ) | $ | (70,490 | ) | $ | (63,219 | ) | $ | 202,874 | $ | (73,061 | ) | |||||||
F-21
Table of Contents
For the three months ended March 31, 2010
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Cash flow from operating activities | ||||||||||||||||||||||||
Net income | $ | 31,101 | $ | 31,794 | $ | 18,646 | $ | 29,931 | $ | (80,371 | ) | $ | 31,101 | |||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 15,405 | 72 | — | 15,477 | ||||||||||||||||||
Provision for severance benefits | — | — | 3,081 | 85 | — | 3,166 | ||||||||||||||||||
Amortization of debt issuance costs | — | 25 | — | — | — | 25 | ||||||||||||||||||
Loss (gain) on foreign currency translation, net | — | 11,757 | (23,734 | ) | (11,501 | ) | — | (23,478 | ) | |||||||||||||||
Gain on disposal of property, plant and equipment, net | — | — | (9 | ) | — | — | (9 | ) | ||||||||||||||||
Loss on disposal of intangible assets, net | — | — | 2 | — | — | 2 | ||||||||||||||||||
Restructuring and impairment charges | — | — | 336 | — | — | 336 | ||||||||||||||||||
Unit-based compensation | 334 | — | 1,040 | 99 | — | 1,473 | ||||||||||||||||||
Cash used for reorganization items | — | — | 51 | 1,528 | — | 1,579 | ||||||||||||||||||
Earnings of related investment | (31,664 | ) | (30,507 | ) | — | (18,940 | ) | 81,111 | — | |||||||||||||||
Other | — | 1 | 480 | (88 | ) | — | 393 | |||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts receivable | — | — | (18,065 | ) | 15,150 | (26,769 | ) | (29,684 | ) | |||||||||||||||
Inventories | — | — | 3,661 | 4,312 | (767 | ) | 7,206 | |||||||||||||||||
Other receivables | — | — | (5,039 | ) | 274 | 3,527 | (1,238 | ) | ||||||||||||||||
Deferred tax assets | — | — | — | 264 | — | 264 | ||||||||||||||||||
Accounts payable | — | — | 21,040 | (29,705 | ) | 26,753 | 18,088 | |||||||||||||||||
Other accounts payable | 2,771 | 936 | (673 | ) | (1,119 | ) | (3,527 | ) | (1,612 | ) | ||||||||||||||
Accrued expenses | (93 | ) | (90 | ) | 15,407 | 12,353 | (24,381 | ) | 3,196 | |||||||||||||||
Long term other payable | — | — | — | (7 | ) | (2,129 | ) | (2,136 | ) | |||||||||||||||
Other current assets | (2,509 | ) | (13,737 | ) | (1,363 | ) | (10,306 | ) | 24,256 | (3,659 | ) | |||||||||||||
Other current liabilities | — | — | (1,262 | ) | (1,015 | ) | 170 | (2,107 | ) | |||||||||||||||
Payment of severance benefits | — | — | (1,092 | ) | — | — | (1,092 | ) | ||||||||||||||||
Other | — | — | (788 | ) | — | — | (788 | ) | ||||||||||||||||
Net cash provided by (used in) operating activities before reorganization items | (60 | ) | 179 | 27,124 | (8,613 | ) | (2,127 | ) | 16,503 | |||||||||||||||
Cash used for reorganization items | — | — | (51 | ) | (1,528 | ) | — | (1,579 | ) | |||||||||||||||
Net cash provided by (used in) operating activities | (60 | ) | 179 | 27,073 | (10,141 | ) | (2,127 | ) | 14,924 | |||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Proceeds from disposal of plant, property and equipment | — | — | 13 | — | (9 | ) | 4 | |||||||||||||||||
Proceeds from disposal of intangible assets | — | — | — | — | 27 | 27 | ||||||||||||||||||
Purchases of plant, property and equipment | — | — | (887 | ) | (4 | ) | — | (891 | ) | |||||||||||||||
Payment for intellectual property registration | — | — | (152 | ) | — | — | (152 | ) | ||||||||||||||||
Purchase of short-term financial instruments | — | — | — | 329 | — | 329 | ||||||||||||||||||
Decrease in guarantee deposits | — | — | 219 | 753 | — | 972 | ||||||||||||||||||
Other | — | — | 3 | (53 | ) | — | (50 | ) | ||||||||||||||||
Net cash provided by (used in) investing activities | — | — | (804 | ) | 1,025 | 18 | 239 | |||||||||||||||||
Cash flow from financing activities | ||||||||||||||||||||||||
Repayment of long-term borrowings | — | (154 | ) | — | — | — | (154 | ) | ||||||||||||||||
Net cash used in financing activities | — | (154 | ) | — | — | — | (154 | ) | ||||||||||||||||
Effect of exchanges rate on cash and cash equivalents | — | — | 655 | (10 | ) | 2,109 | 2,754 | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (60 | ) | 25 | 26,924 | (9,126 | ) | — | 17,763 | ||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||
Beginning of the period | 136 | 24 | 45,443 | 19,322 | — | 64,925 | ||||||||||||||||||
End of the period | $ | 76 | $ | 49 | $ | 72,367 | $ | 10,196 | $ | — | $ | 82,688 | ||||||||||||
F-22
Table of Contents
For the three months ended March 29, 2009
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Cash flow from operating activities | ||||||||||||||||||||||||
Net loss | $ | (69,692 | ) | $ | (69,165 | ) | $ | (70,490 | ) | $ | (63,219 | ) | $ | 202,874 | $ | (69,692 | ) | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 9,798 | 615 | — | 10,413 | ||||||||||||||||||
Provision for severance benefits | — | — | 888 | 101 | — | 989 | ||||||||||||||||||
Amortization of debt issuance costs | — | 202 | 41 | — | — | 243 | ||||||||||||||||||
Loss (gain) on foreign currency translation, net | — | 5,009 | 42,761 | (6,337 | ) | — | 41,433 | |||||||||||||||||
Loss (gain) on disposal of property, plant and equipment, net | — | — | (18 | ) | 332 | — | 314 | |||||||||||||||||
Loss on disposal of intangible assets, net | — | — | 44 | — | — | 44 | ||||||||||||||||||
Unit-based compensation | — | — | 99 | 12 | — | 111 | ||||||||||||||||||
Loss of related investment | 69,209 | 62,842 | — | 70,390 | (202,441 | ) | — | |||||||||||||||||
Other | — | — | 248 | 282 | — | 530 | ||||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts receivable | — | — | (13,387 | ) | (8,703 | ) | 11,408 | (10,682 | ) | |||||||||||||||
Inventories | — | — | 11,743 | 512 | (450 | ) | 11,805 | |||||||||||||||||
Other receivables | — | — | 874 | 261 | — | 1,135 | ||||||||||||||||||
Deferred tax assets | — | — | — | 398 | — | 398 | ||||||||||||||||||
Accounts payable | — | — | 4,785 | 8,741 | (11,408 | ) | 2,118 | |||||||||||||||||
Other accounts payable | 407 | — | (1,379 | ) | 71 | — | (901 | ) | ||||||||||||||||
Accrued expenses | 40 | 13,829 | 14,864 | 12,580 | (25,738 | ) | 15,575 | |||||||||||||||||
Long term other payable | — | — | (57 | ) | 406 | 57 | 406 | |||||||||||||||||
Other current assets | (132 | ) | (12,729 | ) | (1,120 | ) | (13,343 | ) | 25,313 | (2,011 | ) | |||||||||||||
Other current liabilities | — | — | 430 | (992 | ) | 450 | (112 | ) | ||||||||||||||||
Payment of severance benefits | — | — | (1,630 | ) | (56 | ) | — | (1,686 | ) | |||||||||||||||
Other | — | — | (764 | ) | 1,785 | (1,172 | ) | (151 | ) | |||||||||||||||
Net cash provided by (used in) operating activities | (168 | ) | (12 | ) | (2,270 | ) | 3,836 | (1,107 | ) | 279 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Proceeds from disposal of plant, property and equipment | — | — | 19 | — | — | 19 | ||||||||||||||||||
Purchases of plant, property and equipment | — | — | (1,396 | ) | — | — | (1,396 | ) | ||||||||||||||||
Payment for intellectual property registration | — | — | (90 | ) | — | — | (90 | ) | ||||||||||||||||
Decrease in restricted cash | — | — | 4,137 | — | — | 4,137 | ||||||||||||||||||
Decrease in guarantee deposits | — | — | 447 | 22 | — | 469 | ||||||||||||||||||
Other | — | — | (6 | ) | 3 | — | (3 | ) | ||||||||||||||||
Net cash provided by investing activities | — | — | 3,111 | 25 | — | 3,136 | ||||||||||||||||||
Cash flow from financing activities | ||||||||||||||||||||||||
Net cash provided by (used in) financing activities | — | — | — | — | — | — | ||||||||||||||||||
Effect of exchanges rate on cash and cash equivalents | — | — | 1,080 | (2,552 | ) | 1,107 | (365 | ) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (168 | ) | (12 | ) | 1,921 | 1,309 | — | 3,050 | ||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||
Beginning of the period | 216 | 56 | 205 | 3,560 | — | 4,037 | ||||||||||||||||||
End of the period | $ | 48 | $ | 44 | $ | 2,126 | $ | 4,869 | $ | — | $ | 7,087 | ||||||||||||
F-23
Table of Contents
F-24
Table of Contents
F-25
Table of Contents
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
(In thousands of US dollars, except unit data) | |||||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 64,925 | $ | 4,037 | |||||
Restricted cash | — | 11,768 | |||||||
Accounts receivable, net | 74,233 | 76,295 | |||||||
Inventories, net | 63,407 | 47,110 | |||||||
Other receivables | 3,433 | 4,701 | |||||||
Prepaid expenses | 12,625 | 9,268 | |||||||
Other current assets | 3,433 | 4,799 | |||||||
Total current assets | 222,056 | 157,978 | |||||||
Property, plant and equipment, net | 156,337 | 183,955 | |||||||
Intangible assets, net | 50,158 | 34,892 | |||||||
Long-term prepaid expenses | 10,542 | 7,714 | |||||||
Other non-current assets | 14,238 | 14,631 | |||||||
Total assets | $ | 453,331 | $ | 399,170 | |||||
LIABILITIES AND UNITHOLDERS’ EQUITY | |||||||||
Current liabilities | |||||||||
Accounts payable | $ | 59,705 | $ | 70,158 | |||||
Other accounts payable | 7,190 | 15,040 | |||||||
Accrued expenses | 22,114 | 38,554 | |||||||
Short-term borrowings | — | 95,000 | |||||||
Current portion of long-term debt | 618 | 750,000 | |||||||
Other current liabilities | 3,937 | 3,735 | |||||||
Total current liabilities | 93,564 | 972,487 | |||||||
Long-term borrowings | 61,132 | — | |||||||
Accrued severance benefits, net | 72,409 | 61,939 | |||||||
Other non-current liabilities | 10,536 | 9,874 | |||||||
Total liabilities | 237,641 | 1,044,300 | |||||||
Commitments and contingencies | |||||||||
Series A redeemable convertible preferred units, $1,000 par value; 60,000 units authorized, 50,091 units issued and 0 unit outstanding at December 31, 2008 | — | — | |||||||
Series B redeemable convertible preferred units, $1,000 par value; 550,000 units authorized, 450,692 units issued, 93,997 units outstanding at December 31, 2008 | — | 142,669 | |||||||
Total redeemable convertible preferred units | — | 142,669 | |||||||
Unitholders’ equity | |||||||||
Successor common units, no par value, 375,000,000 units authorized, 307,083,996 units issued and outstanding at December 31, 2009 | 55,135 | — | |||||||
Predecessor common units, $1 par value; 65,000,000 units authorized, 52,923,483 units issued and outstanding at December 31, 2008 | — | 52,923 | |||||||
Additional paid-in capital | 168,700 | 3,150 | |||||||
Accumulated deficit | (1,963 | ) | (995,007 | ) | |||||
Accumulated other comprehensive income (loss) | (6,182 | ) | 151,135 | ||||||
Total unitholders’ equity (deficit) | 215,690 | (787,799 | ) | ||||||
Total liabilities, redeemable convertible preferred units and unitholders’ equity | $ | 453,331 | $ | 399,170 | |||||
F-26
Table of Contents
Successor | �� | Predecessor | |||||||||||||||
Ten-Month | |||||||||||||||||
Two-Month | Period | ||||||||||||||||
Period Ended | Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
(In thousands of US dollars, except unit data) | |||||||||||||||||
Net sales | $ | 111,082 | $ | 448,984 | $ | 601,664 | $ | 709,508 | |||||||||
Cost of sales | 90,408 | 311,139 | 445,254 | 578,857 | |||||||||||||
Gross profit | 20,674 | 137,845 | 156,410 | 130,651 | |||||||||||||
Selling, general and administrative expenses | 14,540 | 56,288 | 81,314 | 82,710 | |||||||||||||
Research and development expenses | 14,741 | 56,148 | 89,455 | 90,805 | |||||||||||||
Restructuring and impairment charges | — | 439 | 13,370 | 12,084 | |||||||||||||
Operating income (loss) from continuing operations | (8,607 | ) | 24,970 | (27,729 | ) | (54,948 | ) | ||||||||||
Other income (expenses) | |||||||||||||||||
Interest expense, net (contractual interest, net of $47,828 for the ten-month period ended October 25, 2009) | (1,258 | ) | (31,165 | ) | (76,119 | ) | (60,311 | ) | |||||||||
Foreign currency gain (loss), net | 9,338 | 43,437 | (210,406 | ) | (4,732 | ) | |||||||||||
Reorganization items, net | — | 804,573 | — | — | |||||||||||||
8,080 | 816,845 | (286,525 | ) | (65,043 | ) | ||||||||||||
Income (loss) from continuing operations before income taxes | (527 | ) | 841,815 | (314,254 | ) | (119,991 | ) | ||||||||||
Income tax expenses | 1,946 | 7,295 | 11,585 | 8,835 | |||||||||||||
Income (loss) from continuing operations | (2,473 | ) | 834,520 | (325,839 | ) | (128,826 | ) | ||||||||||
Income (loss) from discontinued operations, net of taxes | 510 | 6,586 | (91,455 | ) | (51,724 | ) | |||||||||||
Net income (loss) | $ | (1,963 | ) | $ | 841,106 | $ | (417,294 | ) | $ | (180,550 | ) | ||||||
Dividends accrued on preferred units (contractual dividends of $11,819 for the ten-month period ended October 25, 2009) | — | 6,317 | 13,264 | 12,031 | |||||||||||||
Income (loss) from continuing operations attributable to common units | $ | (2,473 | ) | $ | 828,203 | $ | (339,103 | ) | $ | (140,857 | ) | ||||||
Net income (loss) attributable to common units | $ | (1,963 | ) | $ | 834,789 | $ | (430,558 | ) | $ | (192,581 | ) | ||||||
Earnings (loss) per common unit from continuing operations — Basic and diluted | $ | (0.01 | ) | $ | 15.65 | $ | (6.43 | ) | $ | (2.69 | ) | ||||||
Earnings (loss) per common unit from discontinued operations — Basic and diluted | $ | 0.00 | $ | 0.12 | $ | (1.73 | ) | $ | (0.99 | ) | |||||||
Earnings (loss) per common unit — Basic and diluted | $ | (0.01 | ) | $ | 15.77 | $ | (8.16 | ) | $ | (3.68 | ) | ||||||
Weighted average number of units — Basic and diluted | 300,862,764 | 52,923,483 | 52,768,614 | 52,297,192 |
F-27
Table of Contents
Accumulated | ||||||||||||||||||||||||
Additional | Other | |||||||||||||||||||||||
Common Units | Paid-In | Accumulated | Comprehensive | |||||||||||||||||||||
Units | Amount | Capital | Deficit | Income (Loss) | Total | |||||||||||||||||||
(In thousands of US dollars, except unit data) | ||||||||||||||||||||||||
Balance at January 1, 2007 | 52,720,784 | $ | 52,721 | $ | 2,451 | $ | (370,314 | ) | $ | 30,601 | $ | (284,541 | ) | |||||||||||
(Predecessor Company) | ||||||||||||||||||||||||
Exercise of unit options | 124,938 | 125 | 26 | — | — | 151 | ||||||||||||||||||
Repurchase of common units | (1,500 | ) | (2 | ) | (4 | ) | — | — | (6 | ) | ||||||||||||||
Unit-based compensation | — | — | 604 | — | — | 604 | ||||||||||||||||||
Dividends accrued on preferred units | — | — | — | (12,031 | ) | — | (12,031 | ) | ||||||||||||||||
Impact on beginning accumulated deficit upon adoption of FIN 48 | — | — | — | (1,554 | ) | — | (1,554 | ) | ||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||
Net loss | — | — | — | (180,550 | ) | — | (180,550 | ) | ||||||||||||||||
Fair valuation of derivatives | — | — | — | — | (3,477 | ) | (3,477 | ) | ||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 3,925 | 3,925 | ||||||||||||||||||
Total comprehensive loss | (180,102 | ) | ||||||||||||||||||||||
Balance at December 31, 2007 | 52,844,222 | $ | 52,844 | $ | 3,077 | $ | (564,449 | ) | $ | 31,049 | $ | (477,479 | ) | |||||||||||
(Predecessor Company) | ||||||||||||||||||||||||
Exercise of unit options | 161,460 | �� | 161 | 22 | — | — | 183 | |||||||||||||||||
Repurchase of common units | (82,199 | ) | (82 | ) | (414 | ) | — | — | (496 | ) | ||||||||||||||
Unit-based compensation | — | — | 465 | — | — | 465 | ||||||||||||||||||
Dividends accrued on preferred units | — | — | — | (13,264 | ) | — | (13,264 | ) | ||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||
Net loss | — | — | — | (417,294 | ) | — | (417,294 | ) | ||||||||||||||||
Fair valuation of derivatives | — | — | — | — | (864 | ) | (864 | ) | ||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 120,950 | 120,950 | ||||||||||||||||||
Total comprehensive loss | (297,208 | ) | ||||||||||||||||||||||
Balance at December 31, 2008 | 52,923,483 | $ | 52,923 | $ | 3,150 | $ | (995,007 | ) | $ | 151,135 | $ | (787,799 | ) | |||||||||||
(Predecessor Company) | ||||||||||||||||||||||||
Unit-based compensation | — | — | 233 | — | — | 233 | ||||||||||||||||||
Cancellation of the Predecessor Company’s unit options | — | — | 166 | — | — | 166 | ||||||||||||||||||
Dividends accrued on preferred units | — | — | — | (6,317 | ) | — | (6,317 | ) | ||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||
Net income | — | — | — | 841,106 | — | 841,106 | ||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (30,395 | ) | (30,395 | ) | ||||||||||||||||
Unrealized gains on investments | — | — | — | — | 340 | 340 | ||||||||||||||||||
Total comprehensive income | 811,051 | |||||||||||||||||||||||
Balance at October 25, 2009 | 52,923,483 | $ | 52,923 | $ | 3,549 | $ | (160,218 | ) | $ | 121,080 | $ | 17,334 | ||||||||||||
(Predecessor Company) | ||||||||||||||||||||||||
Fresh-start adjustments: | ||||||||||||||||||||||||
Cancellation of the Predecessor Company’s common units | (52,923,483 | ) | (52,923 | ) | (3,549 | ) | — | — | (56,472 | ) | ||||||||||||||
Elimination of the Predecessor Company’s accumulated deficit and accumulated other comprehensive income | — | — | — | 160,218 | (121,080 | ) | 39,138 | |||||||||||||||||
Issuance of new equity interests in connection with emergence from Chapter 11 | 299,999,996 | 49,539 | 166,322 | — | — | 215,861 | ||||||||||||||||||
Issuance of new warrants in connection with emergence from Chapter 11 | — | — | 2,533 | — | — | 2,533 | ||||||||||||||||||
Balance at October 25, 2009 | 299,999,996 | $ | 49,539 | $ | 168,855 | $ | — | $ | — | $ | 218,394 | |||||||||||||
(Successor Company) | ||||||||||||||||||||||||
Unit-based compensation | 7,084,000 | 5,596 | (155 | ) | — | — | 5,441 | |||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||
Net loss | — | — | — | (1,963 | ) | — | (1,963 | ) | ||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (6,298 | ) | (6,298 | ) | ||||||||||||||||
Unrealized gains on investments | — | — | — | — | 116 | 116 | ||||||||||||||||||
Total comprehensive loss | (8,145 | ) | ||||||||||||||||||||||
Balance at December 31, 2009 | 307,083,996 | $ | 55,135 | $ | 168,700 | $ | (1,963 | ) | $ | (6,182 | ) | $ | 215,690 | |||||||||||
(Successor Company) |
F-28
Table of Contents
Successor | Predecessor | ||||||||||||||||
Two-Month | |||||||||||||||||
Period | Ten-Month | ||||||||||||||||
Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
(In thousands of US dollars) | |||||||||||||||||
Cash flows from operating activities | |||||||||||||||||
Net income (loss) | $ | (1,963 | ) | $ | 841,106 | $ | (417,294 | ) | $ | (180,550 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | |||||||||||||||||
Depreciation and amortization | 11,218 | 38,255 | 71,960 | 163,434 | |||||||||||||
Provision for severance benefits | 1,851 | 8,835 | 14,026 | 18,834 | |||||||||||||
Amortization of debt issuance costs | — | 836 | 16,290 | 3,919 | |||||||||||||
Loss (gain) on foreign currency translation, net | (10,077 | ) | (44,224 | ) | 215,571 | 5,398 | |||||||||||
Loss (gain) on disposal of property, plant and equipment, net | 17 | 95 | (3,094 | ) | (68 | ) | |||||||||||
Loss (gain) on disposal of intangible assets, net | 5 | (9,230 | ) | — | (3,630 | ) | |||||||||||
Restructuring and impairment charges | — | (1,120 | ) | 42,539 | 10,106 | ||||||||||||
Unit-based compensation | 2,199 | 233 | 465 | 604 | |||||||||||||
Cash used for reorganization items | 4,263 | 1,076 | — | — | |||||||||||||
Noncash reorganization items | — | (805,649 | ) | — | — | ||||||||||||
Other | (667 | ) | 2,722 | (400 | ) | 51 | |||||||||||
Changes in operating assets and liabilities | |||||||||||||||||
Accounts receivable | 16,443 | (12,930 | ) | 31,025 | (46,504 | ) | |||||||||||
Inventories | 6,739 | (1,163 | ) | 11,174 | (18,398 | ) | |||||||||||
Other receivables | 1,755 | 31 | 1,016 | 971 | |||||||||||||
Deferred tax assets | 678 | 1,054 | 1,490 | 952 | |||||||||||||
Accounts payable | (14,144 | ) | 6,316 | (5,063 | ) | 26,442 | |||||||||||
Other accounts payable | (12,511 | ) | (11,452 | ) | (19,887 | ) | (6,021 | ) | |||||||||
Accrued expenses | (5,687 | ) | 28,295 | 23,953 | (5,504 | ) | |||||||||||
Long term other payable | (877 | ) | 507 | 121 | 114 | ||||||||||||
Other current assets | 3,192 | 5,896 | 7,401 | 9,840 | |||||||||||||
Other current liabilities | 1,188 | 39 | 1,295 | 5,007 | |||||||||||||
Payment of severance benefits | (1,389 | ) | (4,320 | ) | (6,505 | ) | (7,151 | ) | |||||||||
Other | (125 | ) | (516 | ) | (4,471 | ) | (1,557 | ) | |||||||||
Net cash provided by (used in) operating activities before reorganization items | 2,108 | 44,692 | (18,388 | ) | (23,711 | ) | |||||||||||
Cash used for reorganization items | (4,263 | ) | (1,076 | ) | — | — | |||||||||||
Net cash provided by (used in) operating activities | (2,155 | ) | 43,616 | (18,388 | ) | (23,711 | ) | ||||||||||
Cash flows from investing activities | |||||||||||||||||
Proceeds from disposal of plant, property and equipment | 37 | 329 | 3,122 | 364 | |||||||||||||
Proceeds from disposal of intangible assets | — | 9,375 | — | 4,204 | |||||||||||||
Purchase of plant, property and equipment | (1,258 | ) | (7,513 | ) | (28,608 | ) | (85,294 | ) | |||||||||
Payment for intellectual property registration | (70 | ) | (366 | ) | (1,052 | ) | (1,256 | ) | |||||||||
Decrease (increase) in restricted cash | — | 11,409 | (13,517 | ) | — | ||||||||||||
Purchase of short-term financial instruments | (329 | ) | — | — | — | ||||||||||||
Other | 23 | (96 | ) | 484 | 176 | ||||||||||||
Net cash provided by (used in) investing activities | (1,597 | ) | 13,138 | (39,571 | ) | (81,806 | ) | ||||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from short-term borrowings | — | — | 180,000 | 130,100 | |||||||||||||
Issuance of new common units pursuant to the reorganization plan | — | 35,280 | — | — | |||||||||||||
Issuance of old common units | — | — | 183 | 151 | |||||||||||||
Repayment of short-term borrowings | — | (33,250 | ) | (165,000 | ) | (50,100 | ) | ||||||||||
Repurchase of old common units | — | — | (496 | ) | (6 | ) | |||||||||||
Net cash provided by financing activities | — | 2,030 | 14,687 | 80,145 | |||||||||||||
Effect of exchange rates on cash and cash equivalents | 1,098 | 4,758 | (17,036 | ) | 544 | ||||||||||||
Net increase (decrease) in cash and cash equivalents | (2,654 | ) | 63,542 | (60,308 | ) | (24,828 | ) | ||||||||||
Cash and cash equivalents | |||||||||||||||||
Beginning of the period | 67,579 | 4,037 | 64,345 | 89,173 | |||||||||||||
End of the period | $ | 64,925 | $ | 67,579 | $ | 4,037 | $ | 64,345 | |||||||||
Supplemental cash flow information | |||||||||||||||||
Cash paid for interest | $ | 955 | $ | 7,962 | $ | 39,276 | $ | 57,468 | |||||||||
Cash paid for income taxes | $ | 669 | $ | 8,074 | $ | 13,207 | $ | 5,680 | |||||||||
F-29
Table of Contents
1. | General |
2. | Voluntary Reorganization under Chapter 11 |
F-30
Table of Contents
3. | Fresh-Start Reporting |
F-31
Table of Contents
• | Revenue — The Company based 2009 and 2010 revenue on the historical ten-month period ended October 25, 2009 and the Company’s business plan. For the subsequent four years, revenue projections were based on market growth trends and plans for market share growth. Overall, the Company projected a compound revenue growth for this purpose of 12% for the period between 2009 and 2014. | |
• | Cost of Sales — The Company estimated threesub-components — variable cost, depreciation and other fixed costs. Variable cost was defined as those cost elements directly in proportion to sales and estimated as a certain percentage of projected sales. Depreciation is estimated considering expected depreciation of existing assets and depreciation of assets from the Company’s capital expenditure forecast. Other fixed costs are assumed to be increased by a fixed percentage which was implied by the CPI (Consumer Price Index) rate increases during the projection period. The Company projected cost of sales for the periods between 2009 and 2014 to vary between 70.1% and 62.6%. | |
• | Working Capital Changes — Working capital levels were estimated on the historical levels and benchmarking. |
F-32
Table of Contents
• | Capital Expenditures — Capital expenditures for 2009 and 2010 was determined based on the Company’s capital expenditure forecast. The Company assumed that the capital expenditure level for subsequent years would be determined at 5% of its future projected revenue. |
F-33
Table of Contents
Predecessor | Successor (*) | |||||||||||||||
October 25, | Effects of | Fresh-Start | October 25, | |||||||||||||
2009 | Plan | Valuation | 2009 | |||||||||||||
Assets | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | $ | 14,610 | $ | 52,969 | (a,b,f,j) | $ | — | $ | 67,579 | |||||||
Restricted cash | 52,015 | (52,015 | )(b) | — | — | |||||||||||
Accounts receivable, net | 89,314 | — | — | 89,314 | ||||||||||||
Inventories, net | 51,389 | — | 17,903 | (n) | 69,292 | |||||||||||
Other receivables | 5,189 | — | — | 5,189 | ||||||||||||
Other current assets | 17,477 | (179 | )(c) | (1,233 | )(o) | 16,065 | ||||||||||
Total current assets | 229,994 | 775 | 16,670 | 247,439 | ||||||||||||
Property, plant and equipment, net | 172,358 | — | (13,940 | )(p) | 158,418 | |||||||||||
Intangible assets, net | 26,886 | — | 28,314 | (q) | 55,200 | |||||||||||
Other non-current assets | 23,947 | 235 | (d) | 355 | (r) | 24,537 | ||||||||||
Total assets | $ | 453,185 | $ | 1,010 | $ | 31,399 | $ | 485,594 | ||||||||
Liabilities and Unitholders’ Equity | ||||||||||||||||
Current liabilities | ||||||||||||||||
Accounts payable | $ | 77,395 | $ | — | $ | — | $ | 77,395 | ||||||||
Other accounts payable | 13,515 | 506 | (e) | — | 14,021 | |||||||||||
Accrued expenses | 22,621 | 6,383 | (f) | — | 29,004 | |||||||||||
Short-term borrowings | 95,000 | (95,000 | )(a) | — | — | |||||||||||
Current portion of long-term debt-new | — | 463 | (a) | — | 463 | |||||||||||
Other current liabilities | 3,533 | — | — | 3,533 | ||||||||||||
Liabilities subject to compromise | 798,043 | (798,043 | )(g) | — | — | |||||||||||
Total current liabilities | 1,010,107 | (885,691 | ) | — | 124,416 | |||||||||||
Long-term debt-new | — | 61,287 | (a) | — | 61,287 | |||||||||||
Accrued severance benefits, net | 71,029 | — | — | 71,029 | ||||||||||||
Other non-current liabilities | 10,468 | — | — | 10,468 | ||||||||||||
Total liabilities | 1,091,604 | (824,404 | ) | — | 267,200 | |||||||||||
Commitments and contingencies | ||||||||||||||||
Series A redeemable convertible preferred units | — | — | — | — | ||||||||||||
Series B redeemable convertible preferred units subject to compromise | 148,986 | (148,986 | )(h) | — | — | |||||||||||
Total redeemable convertible preferred units | 148,986 | (148,986 | ) | — | — | |||||||||||
Unitholders’ equity | ||||||||||||||||
Common units-old | 52,923 | (52,923 | )(i) | — | — | |||||||||||
Common units-new | — | 49,539 | (g,j) | — | 49,539 | |||||||||||
Additional paid-in capital | 3,383 | 166 | (s) | — | — | |||||||||||
— | (3,549 | )(i) | — | — | ||||||||||||
— | 2,533 | (g) | — | — | ||||||||||||
— | 166,322 | (m) | — | 168,855 | ||||||||||||
Retained earnings (accumulated deficit) | (964,791 | ) | 160,218 | (k) | — | — | ||||||||||
— | 773,174 | (l) | 31,399 | (l) | — | |||||||||||
Accumulated other comprehensive income | 121,080 | (121,080 | )(k) | — | — | |||||||||||
Total unitholders’ equity | (787,405 | ) | 974,400 | 31,399 | 218,394 | |||||||||||
Total liabilities, redeemable convertible preferred units and unitholders’ equity | $ | 453,185 | $ | 1,010 | $ | 31,399 | $ | 485,594 | ||||||||
(a) | To record the issuance of a new term loan in the amount of $61,750 thousand and 35% cash payment of $33,250 thousand in complete satisfaction of the first lien lender claims arising from |
F-34
Table of Contents
the senior secured credit facility (short-term borrowings) of $95,000 thousand. The new term loan was accounted for as current portion of long-term debt of $463 thousand and long-term debt of $61,287 thousand. | ||
(b) | Cash in Korea Exchange Bank account of $52,015 thousand, restricted under forbearance agreement, was released from restriction according to the debt restructuring by the Plan of Reorganization. | |
(c) | To record impairment of remaining capitalized costs of $166 thousand in connection with entering into the senior secured credit facility, impairment of prepaid agency fee of $14 thousand of the senior secured credit facility and capitalization of costs of $1 thousand in connection with the issuance of the new term loan. | |
(d) | To record capitalization of costs of $235 thousand in connection with the issuance of the new term loan. | |
(e) | To record capitalization of costs incurred in connection with the issuance of the new term loan of $236 thousand and 10% of the general unsecured claims of $270 thousand to be settled in cash. | |
(f) | To record professional fees of $7,459 thousand incurred in relation to the Reorganization Proceeding of which $1,076 thousand was paid in cash with the remainder of $6,383 thousand recorded as accrued expenses. | |
(g) | To record the discharge of liabilities subject to compromise of $798,043 thousand and the issuance of 18,000 thousand new common units and new warrants to purchase 15,000 thousand new common units. The issuances of new common units were recorded as increase in common units by $14,259 thousand and the issuances of new warrants were recorded as increase in additional paid-in capital by $2,533 thousand. Current portion of long-term debt of $750,000 thousand and its accrued interest of $45,341 thousand as of October 25, 2009 were discharged in exchange for new common units representing 6% of the Successor Company’s outstanding common units to two classes of creditors of the Company and new warrants representing 5% of the Successor Company’s outstanding common units to two classes of creditors of the Company. General unsecured claims of $2,702 thousand were also discharged in exchange for a cash payment equal to 10% of the allowed claims of $270 thousand. | |
(h) | To record the retirement of Series B redeemable convertible preferred units of $148,986 thousand without consideration in accordance with the Plan of Reorganization. | |
(i) | To record the retirement of old equity interests without consideration in accordance with the Plan of Reorganization. | |
(j) | To record the issuance of 282,000 thousand new common units which was recorded as an increase in common units by $35,280 thousand. | |
(k) | To record the elimination of the Predecessor Company’s accumulated deficit of $160,218 thousand and accumulated other comprehensive income of $121,080 thousand. | |
(l) | To record reorganization items, net of $804,573 thousand. |
F-35
Table of Contents
(m) | To record $166,322 thousand of additional paid-in capital. Reconciliation of total enterprise value to the reorganization value of the Company, determination of goodwill and additional paid-in capital and allocation of the total enterprise value to common unitholders are as below: |
Total value attributable to debt and equity(1) | $ | 212,564 | ||
Plus: cash and cash equivalents | 67,579 | |||
Plus: liabilities | 205,451 | |||
Reorganization value of the Company’s total assets | 485,594 | |||
Fair value of the Company’s total assets | 485,594 | |||
Goodwill | $ | — | ||
Reorganization value of the Company’s total assets | $ | 485,594 | ||
Less: liabilities | (205,450 | ) | ||
Less: new term loan | (61,750 | ) | ||
Fair value of new warrants issued | (2,533 | ) | ||
Fair value of new common units issued | (49,539 | ) | ||
Additional paid-in capital | $ | 166,322 | ||
Enterprise value allocated to common unitholders | $ | 215,861 | ||
(1) | The Plan of Reorganization, which was confirmed by the bankruptcy court, includes an estimated total value attributable to debt and equity of $225.0 million. This amount does not include cash balances and non-financial liabilities as of the Reorganization Effective Date. |
(n) | To record the fair value of inventories, net, as estimated by the Predecessor Company, fair value of finished goods was estimated by subtracting from average selling prices the sum of costs of disposal and a reasonable profit allowance for the selling effort. Fair value ofwork-in-process was estimated by subtracting from average selling prices the sum of costs to complete, costs of disposal and a reasonable profit allowance for the completing and selling effort based on profit for similar finished goods. Fair value of raw materials was estimated by current replacement costs. | |
(o) | To record the fair value of advance payments as estimated by the Predecessor Company. For the value of advance payments, the Orderly Liquidation Value (“OLV”) was estimated using the cost and market approaches. | |
(p) | To record the fair value of property, plant and equipment, net as estimated by the Predecessor Company. For the value of certain fixed assets, the OLV was estimated using the cost and market approaches. This premise of value was chosen given the fact that the Company was just emerging from bankruptcy proceedings. | |
(q) | To record the fair value of intangible assets, net as estimated by the Predecessor Company. Discrete valuations of each of the reporting units’ identified intangible assets related to technology, contracts, trade names, customer-based intangible assets and acquired in-process research and development (“IPR&D”) were performed using the excess earnings method or the royalty savings method. | |
(r) | To record the Predecessor Company’s other non-current assets at their estimated fair value using observable market data. |
F-36
Table of Contents
(s) | To record the immediately recognized unit-based compensation of $166 thousand, which is attributable to old unit options which were cancelled without consideration in accordance with the Plan of Reorganization. | |
(*) | The following table summarizes the allocation of fair value of the assets and liabilities at emergence as shown in the reorganized consolidated balance sheet as of October 25, 2009: |
Cash and cash equivalents | $ | 67,579 | ||
Accounts receivable, net | 89,314 | |||
Inventories, net | 69,292 | |||
Other receivables | 5,189 | |||
Other current assets | 16,065 | |||
Property, plant and equipment, net | 158,418 | |||
Intangible assets, net | 55,200 | |||
Other non-current assets | 24,537 | |||
Total assets | 485,594 | |||
Less: current liabilities (including current portion of long-term debt) | (124,416 | ) | ||
Less: long-term debt | (61,287 | ) | ||
Less: non-current liabilities | (81,497 | ) | ||
Total liabilities assumed | (267,200 | ) | ||
Net assets acquired | $ | 218,394 | ||
4. | Summary of Significant Accounting Policies |
F-37
Table of Contents
F-38
Table of Contents
Buildings | 30 - 40 years | |
Building related structures | 10 - 20 years | |
Machinery and equipment | 5 - 10 years | |
Vehicles and others | 5 years |
F-39
Table of Contents
F-40
Table of Contents
F-41
Table of Contents
F-42
Table of Contents
F-43
Table of Contents
F-44
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F-45
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F-46
Table of Contents
F-47
Table of Contents
5. | Reorganization Related Items |
Predecessor | ||||
Ten-Month Period | ||||
Ended October 25, | ||||
2009 | ||||
Professional fees | $ | (7,459 | ) | |
Revaluation of assets | 31,399 | |||
Effects of the plan of reorganization | 780,981 | |||
Write-off of debt issuance costs | (166 | ) | ||
Others | (182 | ) | ||
Total | $ | 804,573 | ||
Predecessor | ||||
Ten-Month Period | ||||
Ended October 25, | ||||
2009 | ||||
Discharge of liabilities subject to compromise | $ | 798,043 | ||
Issuance of new common units | (14,259 | ) | ||
Issuance of new warrants | (2,533 | ) | ||
Accrual of amounts to be settled in cash | (270 | ) | ||
Gain from the effects of the Plan of Reorganization | $ | 780,981 | ||
Predecessor | ||||
October 25, | ||||
2009 | ||||
General unsecured claims | $ | 2,702 | ||
Current portion of long-term debt-old | 750,000 | |||
Accrued interest on current portion of long-term debt | 45,341 | |||
Total | $ | 798,043 | ||
F-48
Table of Contents
6. | Fair Value Measurements |
F-49
Table of Contents
Successor | ||||||||||||||||||||||
Quoted Prices | ||||||||||||||||||||||
in Active | Significant | |||||||||||||||||||||
Markets for | Other | Significant | ||||||||||||||||||||
As of | Identical | Observable | Unobservable | Total | ||||||||||||||||||
October 25, | Assets | Inputs | Inputs | Gains | Valuation | |||||||||||||||||
2009 | (Level 1) | (Level 2) | (Level 3) | (Losses) | Technique | |||||||||||||||||
ASSETS | ||||||||||||||||||||||
Other current assets | $ | 439 | $ | 439 | $ | (1,233 | ) | (B), (C)-I | ||||||||||||||
Inventories | ||||||||||||||||||||||
Finished goods | 10,078 | $ | 10,078 | 2,557 | (A), (C)-I | |||||||||||||||||
Semi-finished goods andwork-in-process | 52,309 | 52,309 | 15,346 | (A), (B), (C)-I | ||||||||||||||||||
Property, plant and equipment | ||||||||||||||||||||||
Land | 14,902 | 14,902 | 5,091 | (A), (C)-I | ||||||||||||||||||
Building | 71,007 | 71,007 | (25,113 | ) | (A), (C)-I | |||||||||||||||||
Furniture and fixture | 1,435 | 1,435 | (4,771 | ) | (B), (C)-I | |||||||||||||||||
Machinery and equipment | 69,664 | 69,664 | 14,867 | (B), (C)-I | ||||||||||||||||||
Structure | 119 | 119 | (1,814 | ) | (B), (C)-I | |||||||||||||||||
Other tangible assets | 1,291 | 1,291 | (2,200 | ) | (B), (C)-I | |||||||||||||||||
Intangible assets | ||||||||||||||||||||||
Technology | 14,745 | 14,745 | 13,095 | (C)-I, II, III | ||||||||||||||||||
Customer relationships | 26,100 | 26,100 | 3,132 | (C)-I, II | ||||||||||||||||||
Intellectual property assets | 4,655 | 4,655 | 2,387 | (C)-I, III | ||||||||||||||||||
In-process research and development | 9,700 | 9,700 | 9,700 | (C)-I, II | ||||||||||||||||||
Other non-current assets | 2,270 | 2,270 | 355 | (A) | ||||||||||||||||||
$ | 31,399 | |||||||||||||||||||||
F-50
Table of Contents
7. | Accounts Receivable |
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Accounts receivable | $ | 74,516 | $ | 67,186 | |||||
Notes receivable | 3,260 | 12,450 | |||||||
Less: | |||||||||
Allowances for doubtful accounts | (377 | ) | (1,569 | ) | |||||
Cash return reserve | (1,729 | ) | (671 | ) | |||||
Low yield compensation reserve | (1,437 | ) | (1,101 | ) | |||||
Accounts receivable, net | $ | 74,233 | $ | 76,295 | |||||
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Beginning balance | $ | — | $ | (1,569 | ) | $ | (1,367 | ) | $ | (1,418 | ) | ||||||
Bad debt expense | (379 | ) | (723 | ) | (503 | ) | (161 | ) | |||||||||
Write off | — | — | 104 | 208 | |||||||||||||
Translation adjustments | 2 | (40 | ) | 197 | 4 | ||||||||||||
Ending balance | $ | (377 | ) | $ | (2,332 | ) | $ | (1,569 | ) | $ | (1,367 | ) | |||||
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Beginning balance | $ | (1,545 | ) | $ | (671 | ) | $ | (914 | ) | $ | (1,450 | ) | |||||
Addition to reserve | (648 | ) | (4,476 | ) | (3,385 | ) | (2,509 | ) | |||||||||
Payment made | 484 | 3,722 | 3,393 | 3,040 | |||||||||||||
Translation adjustments | (20 | ) | (120 | ) | 235 | 5 | |||||||||||
Ending balance | $ | (1,729 | ) | $ | (1,545 | ) | $ | (671 | ) | $ | (914 | ) | |||||
F-51
Table of Contents
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Beginning balance | $ | (1,213 | ) | $ | (1,101 | ) | $ | (1,260 | ) | $ | (2,482 | ) | |||||
Addition to reserve | (715 | ) | (1,759 | ) | (1,854 | ) | (1,307 | ) | |||||||||
Payment made | 507 | 1,724 | 1,663 | 2,523 | |||||||||||||
Translation adjustments | (16 | ) | (77 | ) | 350 | 6 | |||||||||||
Ending balance | $ | (1,437 | ) | $ | (1,213 | ) | $ | (1,101 | ) | $ | (1,260 | ) | |||||
8. | Inventories |
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Finished goods | $ | 19,474 | $ | 22,694 | |||||
Semi-finished goods andwork-in-process | 42,604 | 49,814 | |||||||
Raw materials | 5,844 | 7,471 | |||||||
Materials in-transit | 64 | 206 | |||||||
Less: inventory reserve | (4,579 | ) | (33,075 | ) | |||||
Inventories, net | $ | 63,407 | $ | 47,110 | |||||
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Beginning balance | $ | — | $ | (33,075 | ) | $ | (8,620 | ) | $ | (11,652 | ) | ||||||
Change in reserve | (4,952 | ) | 8,081 | (34,869 | ) | 1,101 | |||||||||||
Write off | 391 | 11,297 | 4,992 | 1,888 | |||||||||||||
Translation adjustments | (18 | ) | 17 | 5,422 | 43 | ||||||||||||
Ending balance | $ | (4,579 | ) | $ | (13,680 | ) | $ | (33,075 | ) | $ | (8,620 | ) | |||||
F-52
Table of Contents
9. | Property, Plant and Equipment |
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Buildings and related structures | $ | 72,076 | $ | 111,933 | |||||
Machinery and equipment | 71,505 | 318,440 | |||||||
Vehicles and others | 3,043 | 40,422 | |||||||
146,624 | 470,795 | ||||||||
Less: accumulated depreciation | (5,388 | ) | (296,038 | ) | |||||
Land | 15,101 | 9,198 | |||||||
Property, plant and equipment, net | $ | 156,337 | $ | 183,955 | |||||
10. | Intangible Assets |
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Technology | $ | 14,942 | $ | 14,156 | |||||
Customer relationships | 26,448 | 112,167 | |||||||
Intellectual property assets | 4,779 | 6,011 | |||||||
In-process research and development | 9,829 | — | |||||||
Less: accumulated amortization | (5,840 | ) | (97,442 | ) | |||||
Intangible assets, net | $ | 50,158 | $ | 34,892 | |||||
F-53
Table of Contents
F-54
Table of Contents
11. | Product Warranties |
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Beginning balance | $ | 929 | $ | 474 | $ | 211 | $ | 112 | |||||||||
Addition to warranty reserve | (16 | ) | 1,928 | 2,608 | 586 | ||||||||||||
Payments made | (4 | ) | (1,544 | ) | (2,243 | ) | (486 | ) | |||||||||
Translation adjustments | 12 | 71 | (102 | ) | (1 | ) | |||||||||||
Ending balance | $ | 921 | $ | 929 | $ | 474 | $ | 211 | |||||||||
12. | Short-Term Borrowings |
F-55
Table of Contents
Annual Interest | Amount of | |||||||||
Maturity | Rate (%) | Principal | ||||||||
Euro dollar revolving loan | January 15, 2009 | 3 month LIBOR + 6.75 | $ | 10,000 | ||||||
Alternate Base Rate (“ABR”) revolving loan | March 31, 2009 | ABR + 5.75 | 85,000 | |||||||
$ | 95,000 | |||||||||
13. | Current Portion of Long-term Debt |
Annual Interest | Amount of | |||||||||
Maturity | Rate (%) | Principal | ||||||||
Floating Rate Second Priority Senior Secured Notes | 2011 | 3 month LIBOR + 3.250 | $ | 300,000 | ||||||
67/8% Second Priority Senior Secured Notes | 2011 | 6.875 | 200,000 | |||||||
8% Senior Subordinated Notes | 2014 | 8.000 | 250,000 | |||||||
$ | 750,000 | |||||||||
F-56
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F-57
Table of Contents
14. | Long-Term Debt |
F-58
Table of Contents
15. | Accrued Severance Benefits |
F-59
Table of Contents
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Beginning balance | $ | 72,243 | $ | 63,147 | $ | 75,869 | $ | 64,642 | |||||||||
Provisions | 1,851 | 8,835 | 14,026 | 18,834 | |||||||||||||
Severance payments | (1,389 | ) | (4,320 | ) | (6,505 | ) | (7,151 | ) | |||||||||
Translation adjustments | 941 | 4,581 | (20,243 | ) | (456 | ) | |||||||||||
73,646 | 72,243 | 63,147 | 75,869 | ||||||||||||||
Less: Cumulative contributions to the National Pension Fund | (530 | ) | (533 | ) | (539 | ) | (784 | ) | |||||||||
Group severance insurance plan | (707 | ) | (681 | ) | (669 | ) | (909 | ) | |||||||||
$ | 72,409 | $ | 71,029 | $ | 61,939 | $ | 74,176 | ||||||||||
Severance | ||||
Benefit | ||||
2010 | $ | 33 | ||
2011 | 69 | |||
2012 | 135 | |||
2013 | — | |||
2014 | 279 | |||
2015 — 2019 | 8,332 |
16. | Redeemable Convertible Preferred Units |
F-60
Table of Contents
Predecessor | ||||||||||||||||||||||||
Ten-Month | Year Ended | Year Ended | ||||||||||||||||||||||
Period Ended | December 31, | December 31, | ||||||||||||||||||||||
October 25, 2009 | 2008 | 2007 | ||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | |||||||||||||||||||
Series B Units | ||||||||||||||||||||||||
Beginning of the period | 93,997 | $ | 142,669 | 93,997 | $ | 129,405 | 93,997 | $ | 117,374 | |||||||||||||||
Accrual of preferred dividends | — | 6,317 | — | 13,264 | — | 12,031 | ||||||||||||||||||
End of the period | 93,997 | $ | 148,986 | 93,997 | $ | 142,669 | 93,997 | $ | 129,405 | |||||||||||||||
F-61
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17. | Warrants |
F-62
Table of Contents
18. | Common Units |
As of December 31, | ||||||||
2009 | ||||||||
Units | Amount | |||||||
Common units at the beginning of the period | 299,999,996 | $ | 49,539 | |||||
Restricted unit bonuses issued | 7,084,000 | 5,596 | ||||||
Total common units issued and outstanding at the end of the period | 307,083,996 | $ | 55,135 | |||||
19. | Equity Incentive Plans |
F-63
Table of Contents
Successor Company | ||||||||||||||||||||
Weighted | ||||||||||||||||||||
Weighted | Aggregate | Average | ||||||||||||||||||
Average | Intrinsic | Remaining | ||||||||||||||||||
Number of | Exercise | Value of | Contractual | |||||||||||||||||
Restricted Unit | Number of | Price of Unit | Unit | Life of | ||||||||||||||||
Bonuses | Options | Options | Options | Unit Options | ||||||||||||||||
Outstanding at October 25, 2009 | — | — | — | |||||||||||||||||
Granted | 7,084,000 | 15,365,000 | $ | 1.16 | ||||||||||||||||
Released from restriction | 2,408,560 | — | ||||||||||||||||||
Outstanding at December 31, 2009 | 4,675,440 | 15,365,000 | 1.16 | — | 9.9 years | |||||||||||||||
Vested and expected to vest at December 31, 2009 | 13,553,302 | — | 9.9 years | |||||||||||||||||
Exercisable at December 31, 2009 | — | — | — | |||||||||||||||||
F-64
Table of Contents
Two-Month Period Ended | ||||
December 31, 2009 | ||||
Grant-date fair value of option (in US dollars) | $ | 0.22 | ||
Expected term | 2.9 Years | |||
Risk-free interest rate | 0.6 | % | ||
Expected volatility | 59.1 | % | ||
Expected dividends | — |
Two-Month Period | ||||||||
Ended December 31, 2009 | ||||||||
Weighted Average | ||||||||
Number | Grant-Date Fair Value | |||||||
Unvested options at the beginning of the period | — | $ | — | |||||
Granted options during the period | 15,365,000 | 0.22 | ||||||
Vested options during the period | — | — | ||||||
Unvested options at the end of the period | 15,365,000 | 0.22 |
F-65
Table of Contents
F-66
Table of Contents
Predecessor Company | ||||||||||||||||||
Weighted | Aggregate | Weighted | ||||||||||||||||
Average | Intrinsic | Average | ||||||||||||||||
Number of | Exercise | Value of | Remaining | |||||||||||||||
Restricted | Number of | Price of Unit | Unit | Contractual Life | ||||||||||||||
Units | Options | Options | Options | of Unit Options | ||||||||||||||
Outstanding at January 1, 2008 | 268,343 | 4,916,840 | $ | 1.9 | ||||||||||||||
Granted | — | 315,000 | 5.8 | |||||||||||||||
Exercised | — | 161,460 | 1.1 | $ | 787 | |||||||||||||
Forfeited/Repurchased | — | 853,780 | 3.1 | |||||||||||||||
Released from restriction | 268,343 | — | ||||||||||||||||
Outstanding at December 31, 2008 | — | 4,216,600 | 1.9 | 15,118 | 6.9 years | |||||||||||||
Vested and expected to vest at December 31, 2008 | 3,973,510 | 1.9 | 14,412 | 6.9 years | ||||||||||||||
Exercisable at December 31, 2008 | 3,085,038 | 1.7 | 11,827 | 6.6 years | ||||||||||||||
Outstanding at January 1, 2009 | — | 4,216,600 | 1.9 | |||||||||||||||
Granted | — | — | — | |||||||||||||||
Exercised | — | — | — | — | ||||||||||||||
Forfeited /Repurchased | — | 391,500 | 2.5 | |||||||||||||||
Released from restriction | — | — | ||||||||||||||||
Outstanding at October 25, 2009 (Predecessor Company) | — | 3,825,100 | 1.9 | — | 6.1 years | |||||||||||||
Application of fresh-start reporting (Note 4) | — | (3,825,100 | ) | |||||||||||||||
Outstanding at October 25, 2009 (Successor Company) | — | — | ||||||||||||||||
F-67
Table of Contents
Predecessor | ||||||||
Year Ended | December 31, | |||||||
December 31, | Year Ended | |||||||
2008 | 2007 | |||||||
Grant-date fair value of option | $ | 0.87 | $ | 0.67 | ||||
Expected term | 2.2 Years | 2.1 Years | ||||||
Risk-free interest rate | 2.5 | % | 4.4 | % | ||||
Expected volatility | 42.0 | % | 46.6 | % | ||||
Expected dividends | — | — |
Ten-Month | Year Ended | Year Ended | ||||||||||||||||||||||
Period Ended October 25, 2009 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Grant-Date | Grant-Date | Grant-Date | ||||||||||||||||||||||
Number | Fair Value | Number | Fair Value | Number | Fair Value | |||||||||||||||||||
Unvested options at the beginning of the period | 1,131,563 | $ | 0.65 | 2,374,896 | $ | 0.43 | 3,481,528 | $ | 0.29 | |||||||||||||||
Granted options during the period | — | — | 315,000 | 0.87 | 710,000 | 0.67 | ||||||||||||||||||
Vested options during the period | 520,969 | 0.51 | 1,108,772 | 0.31 | 1,339,570 | 0.23 | ||||||||||||||||||
Forfeited options during the period | 391,500 | 0.17 | 853,780 | 0.51 | 737,750 | 0.23 | ||||||||||||||||||
Unvested options at the end of the period | 547,438 | 0.88 | 1,131,563 | 0.65 | 2,374,896 | 0.43 |
20. | Discontinued Operations |
F-68
Table of Contents
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Net sales | $ | 947 | $ | 2,728 | $ | 65,862 | $ | 82,848 | |||||||||
Cost of sales | 369 | 3,617 | 81,789 | 75,930 | |||||||||||||
Selling, general and administrative expenses | 68 | (6,355 | ) | 3,491 | 10,280 | ||||||||||||
Research and development expenses | — | — | 37,506 | 48,058 | |||||||||||||
Restructuring and impairment charges | — | (1,120 | ) | 34,158 | — | ||||||||||||
Income tax expenses | — | — | 373 | 304 | |||||||||||||
Income (loss) from discontinued operations, net of taxes | $ | 510 | $ | 6,586 | $ | (91,455 | ) | $ | (51,724 | ) | |||||||
F-69
Table of Contents
21. | Restructuring and Impairment Charges |
F-70
Table of Contents
22. | Income Taxes |
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Income (loss) from continuing operations before income taxes | |||||||||||||||||
Domestic | $ | (4 | ) | $ | 774,188 | $ | 18,442 | $ | 16,031 | ||||||||
Foreign | (523 | ) | 67,627 | (332,696 | ) | (136,022 | ) | ||||||||||
$ | (527 | ) | $ | 841,815 | $ | (314,254 | ) | $ | (119,991 | ) | |||||||
Current income taxes expense (benefits) | |||||||||||||||||
Domestic | $ | 16 | $ | (143 | ) | $ | 1,335 | $ | 230 | ||||||||
Foreign | 1,244 | 6,033 | 8,530 | 8,103 | |||||||||||||
Uncertain tax position liability (domestic) | 9 | 256 | 92 | — | |||||||||||||
Uncertain tax position liability (foreign) | 23 | 95 | 138 | 163 | |||||||||||||
1,292 | 6,241 | 10,095 | 8,496 | ||||||||||||||
Deferred income taxes expense (benefits) | |||||||||||||||||
Domestic | — | — | — | — | |||||||||||||
Foreign | 654 | 1,054 | 1,490 | 339 | |||||||||||||
654 | 1,054 | 1,490 | 339 | ||||||||||||||
Total income tax expense | $ | 1,946 | $ | 7,295 | $ | 11,585 | $ | 8,835 | |||||||||
F-71
Table of Contents
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Provision computed at statutory rate | $ | — | $ | — | $ | — | $ | — | |||||||||
Permanent differences | (693 | ) | (19,500 | ) | (1,076 | ) | 4,831 | ||||||||||
Change in statutory tax rate | (265 | ) | 118 | 8,173 | (18,242 | ) | |||||||||||
Adjustment for overseas tax rate | 3,139 | 8,192 | (52,569 | ) | (27,028 | ) | |||||||||||
Change in valuation allowance | (267 | ) | 18,134 | 56,827 | 49,111 | ||||||||||||
Uncertain tax positions liability | 32 | 351 | 230 | 163 | |||||||||||||
Income tax expenses | $ | 1,946 | $ | 7,295 | $ | 11,585 | $ | 8,835 | |||||||||
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Deferred tax assets | |||||||||
Inventories | $ | — | $ | 9,086 | |||||
Accrued expenses | 2,056 | 1,419 | |||||||
Product warranties | 322 | 152 | |||||||
Other reserves | 530 | 356 | |||||||
Accumulated severance benefits | 12,042 | 9,908 | |||||||
Property, plant and equipments | 15,503 | 13,981 | |||||||
NOL carry-forwards | 146,833 | 98,745 | |||||||
Tax credit | 31,558 | 23,947 | |||||||
Royalty income | 5,985 | 10,629 | |||||||
Foreign currency translation loss | 30,198 | 40,916 | |||||||
Debt issuance costs | 284 | 397 | |||||||
Others | 3,081 | 1,402 | |||||||
Total deferred tax assets | 248,392 | 210,938 | |||||||
Less: valuation allowance | (225,704 | ) | (196,093 | ) | |||||
22,688 | 14,845 | ||||||||
Deferred tax liabilities | |||||||||
Inventories | 1,721 | — | |||||||
Intangible assets | 12,247 | — | |||||||
Others | 243 | 4,450 | |||||||
Total deferred tax liabilities | 14,211 | 4,450 | |||||||
Net deferred tax assets | $ | 8,477 | $ | 10,395 | |||||
F-72
Table of Contents
Successor | Predecessor | ||||||||||||
Two-Month | Ten-Month | ||||||||||||
Period Ended | Period Ended | Year Ended | |||||||||||
December 31, | October 25, | December 31, | |||||||||||
2009 | 2009 | 2008 | |||||||||||
Beginning balance | $ | 223,367 | $ | 196,093 | $ | 165,977 | |||||||
Charge to expenses | (409 | ) | 17,090 | 79,438 | |||||||||
Translation adjustment | 2,746 | 10,184 | (49,322 | ) | |||||||||
Ending balance | $ | 225,704 | $ | 223,367 | $ | 196,093 | |||||||
F-73
Table of Contents
Successor | Predecessor | ||||||||||||
Two-Month | Ten-Month | ||||||||||||
Period Ended | Period Ended | Year Ended | |||||||||||
December 31, | October 25, | December 31, | |||||||||||
2009 | 2009 | 2008 | |||||||||||
Unrecognized tax benefits, balance at the beginning | $ | 2,874 | $ | 2,293 | $ | 1,593 | |||||||
Additions based on tax positions related to the current year | — | 33 | — | ||||||||||
Additions for tax positions of prior years | 123 | 635 | 748 | ||||||||||
Reductions for tax positions of prior years | (18 | ) | (88 | ) | (64 | ) | |||||||
Settlements | — | — | — | ||||||||||
Lapse of statute of limitations | — | — | — | ||||||||||
Translation adjustment | — | 1 | 16 | ||||||||||
Unrecognized tax benefits, balance at the ending | $ | 2,979 | $ | 2,874 | $ | 2,293 | |||||||
23. | Geographic and Segment Information |
F-74
Table of Contents
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Net Sales | |||||||||||||||||
Display Solutions | $ | 51,044 | $ | 231,894 | $ | 304,095 | $ | 331,684 | |||||||||
Semiconductor Manufacturing Services | 54,759 | 206,662 | 287,111 | 321,034 | |||||||||||||
Power Solutions | 4,746 | 7,627 | 5,437 | — | |||||||||||||
All other | 533 | 2,801 | 5,021 | 56,790 | |||||||||||||
Total segment net sales | $ | 111,082 | $ | 448,984 | $ | 601,664 | $ | 709,508 | |||||||||
Gross Profit | |||||||||||||||||
Display Solutions | $ | 8,747 | $ | 61,788 | $ | 57,386 | $ | 41,524 | |||||||||
Semiconductor Manufacturing Services | 10,657 | 71,825 | 98,411 | 67,127 | |||||||||||||
Power Solutions | 736 | 1,431 | (4,272 | ) | — | ||||||||||||
All other | 534 | 2,801 | 4,885 | 22,000 | |||||||||||||
Total segment gross profit | $ | 20,674 | $ | 137,845 | $ | 156,410 | $ | 130,651 | |||||||||
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Korea | $ | 62,241 | $ | 244,309 | $ | 301,006 | $ | 404,276 | |||||||||
Asia Pacific | 25,573 | 116,920 | 144,482 | 155,488 | |||||||||||||
Japan | 6,477 | 31,641 | 79,892 | 71,211 | |||||||||||||
North America | 14,910 | 48,458 | 61,346 | 58,506 | |||||||||||||
Europe | 1,881 | 7,656 | 14,938 | 20,027 | |||||||||||||
$ | 111,082 | $ | 448,984 | $ | 601,664 | $ | 709,508 | ||||||||||
F-75
Table of Contents
24. | Commitments and Contingencies |
2010 | 6,840 | |||
2011 | 1,883 | |||
2012 | 1,883 | |||
2013 | 1,883 | |||
2014 | 1,883 | |||
2015 and thereafter | 37,244 | |||
$ | 51,616 | |||
F-76
Table of Contents
25. | Related Party Transactions |
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Short-term loans | $ | 40 | $ | 94 | |||||
Long-term loans | 45 | 46 | |||||||
Total | $ | 85 | $ | 140 | |||||
F-77
Table of Contents
26. | Earnings (Loss) per Unit |
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Income (loss) from continuing operations | $ | (2,473 | ) | $ | 834,520 | $ | (325,839 | ) | $ | (128,826 | ) | ||||||
Income (loss) from discontinued operations, net of taxes | 510 | 6,586 | (91,455 | ) | (51,724 | ) | |||||||||||
Net income (loss) | (1,963 | ) | 841,116 | (417,294 | ) | (180,550 | ) | ||||||||||
Dividends accrued on preferred unitholders | — | (6,317 | ) | (13,264 | ) | (12,031 | ) | ||||||||||
Income (loss) from continuing operations attributable to common units | $ | (2,473 | ) | $ | 828,203 | $ | (339,103 | ) | $ | (140,857 | ) | ||||||
Net income (loss) attributable to common units | $ | (1,963 | ) | $ | 834,789 | $ | (430,558 | ) | $ | (192,581 | ) | ||||||
Weighted average common units outstanding | 300,862,764 | 52,923,483 | 52,768,614 | 52,297,192 | |||||||||||||
Basic and diluted earnings (loss) per unit from continuing operations | $ | (0.01 | ) | $ | 15.65 | $ | (6.43 | ) | $ | (2.69 | ) | ||||||
Basic and diluted earnings (loss) per unit from discontinued operations | $ | 0.00 | $ | 0.12 | $ | (1.73 | ) | $ | (0.99 | ) | |||||||
Basic and diluted net earnings (loss) per unit | $ | (0.01 | ) | $ | 15.77 | $ | (8.16 | ) | $ | (3.68 | ) | ||||||
Successor | Predecessor | ||||||||||||||||
Two-Month | Ten-Month | ||||||||||||||||
Period Ended | Period Ended | Year Ended | Year Ended | ||||||||||||||
December 31, | October 25, | December 31, | December 31, | ||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Redeemable convertible preferred units | NA | 93,997 | 93,997 | 93,997 | |||||||||||||
Options | 15,365,000 | 3,825,100 | 4,216,600 | 4,916,840 | |||||||||||||
Restricted Units | 4,675,440 | — | — | 268,343 | |||||||||||||
Warrants | 15,000,000 | — | — | — |
F-78
Table of Contents
27. | Subsequent Events |
A. | Cash Flow Hedge Transactions |
B. | Issuance of $250 Million of Senior Notes and Applications of Net Proceeds (Unaudited) |
28. | Condensed Consolidating Financial Information |
F-79
Table of Contents
December 31, 2009
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 136 | $ | 24 | $ | 45,443 | $ | 19,322 | $ | — | $ | 64,925 | ||||||||||||
Accounts receivable, net | — | — | 122,500 | 66,872 | (115,139 | ) | 74,233 | |||||||||||||||||
Inventories, net | — | — | 59,914 | 4,098 | (605 | ) | 63,407 | |||||||||||||||||
Other receivables | 710 | 718 | 7,061 | 3,617 | (8,673 | ) | 3,433 | |||||||||||||||||
Prepaid expenses | 165 | 85 | 14,122 | 1,150 | (2,897 | ) | 12,625 | |||||||||||||||||
Short-term intercompany loan | — | 95,000 | — | 95,000 | (190,000 | ) | — | |||||||||||||||||
Other current assets | 16 | 72,614 | 776 | 72,868 | (142,841 | ) | 3,433 | |||||||||||||||||
Total current assets | 1,027 | 168,441 | 249,816 | 262,927 | (460,155 | ) | 222,056 | |||||||||||||||||
Property, plant and equipment, net | — | — | 155,951 | 386 | — | 156,337 | ||||||||||||||||||
Intangible assets, net | — | — | 49,459 | 699 | — | 50,158 | ||||||||||||||||||
Long-term prepaid expenses | — | — | 22,576 | — | (12,034 | ) | 10,542 | |||||||||||||||||
Investment in subsidiaries | (608,843 | ) | (690,259 | ) | — | (517,520 | ) | 1,816,622 | — | |||||||||||||||
Long-term intercompany loan | 824,091 | 806,355 | — | 621,000 | (2,251,446 | ) | — | |||||||||||||||||
Other non-current assets | — | 234 | 5,753 | 8,251 | — | 14,238 | ||||||||||||||||||
Total Assets | $ | 216,275 | $ | 284,771 | $ | 483,555 | $ | 375,743 | $ | (907,013 | ) | $ | 453,331 | |||||||||||
Liabilities and Unitholders’ Equity | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 106,792 | $ | 67,975 | $ | (115,062 | ) | $ | 59,705 | |||||||||||
Other accounts payable | 485 | 5,551 | 6,337 | 3,490 | (8,673 | ) | 7,190 | |||||||||||||||||
Accrued expenses | 100 | 1,134 | 89,045 | 74,753 | (142,918 | ) | 22,114 | |||||||||||||||||
Short-term intercompany borrowings | — | — | 95,000 | 95,000 | (190,000 | ) | — | |||||||||||||||||
Current portion of long-term debt | — | 618 | — | — | — | 618 | ||||||||||||||||||
Other current liabilities | — | — | 2,935 | 3,899 | (2,897 | ) | 3,937 | |||||||||||||||||
Total current liabilities | 585 | 7,303 | 300,109 | 245,117 | (459,550 | ) | 93,564 | |||||||||||||||||
Long-term borrowings | — | 885,224 | 621,000 | 806,354 | (2,251,446 | ) | 61,132 | |||||||||||||||||
Accrued severance benefits, net | — | — | 71,362 | 1,047 | — | 72,409 | ||||||||||||||||||
Other non-current liabilities | — | — | 8,550 | 14,020 | (12,034 | ) | 10,536 | |||||||||||||||||
Total liabilities | 585 | 892,527 | 1,001,021 | 1,066,538 | (2,723,030 | ) | 237,641 | |||||||||||||||||
Unitholders’ equity | ||||||||||||||||||||||||
Common units | 55,135 | 136,229 | 39,005 | 51,976 | (227,210 | ) | 55,135 | |||||||||||||||||
Additional paid-in capital | 168,700 | (735,940 | ) | (539,175 | ) | (734,525 | ) | 2,009,640 | 168,700 | |||||||||||||||
Accumulated deficit | (1,963 | ) | (1,871 | ) | (11,636 | ) | (2,056 | ) | 15,563 | (1,963 | ) | |||||||||||||
Accumulated other comprehensive income | (6,182 | ) | (6,174 | ) | (5,660 | ) | (6,190 | ) | 18,024 | (6,182 | ) | |||||||||||||
Total unitholders’ equity | 215,690 | (607,756 | ) | (517,466 | ) | (690,795 | ) | 1,816,017 | 215,690 | |||||||||||||||
Total liabilities and unitholders’ equity | $ | 216,275 | $ | 284,771 | $ | 483,555 | $ | 375,743 | $ | (907,013 | ) | $ | 453,331 | |||||||||||
F-80
Table of Contents
December 31, 2008
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 216 | $ | 56 | $ | 205 | $ | 3,560 | $ | — | $ | 4,037 | ||||||||||||
Restricted cash | — | — | 11,768 | — | — | 11,768 | ||||||||||||||||||
Accounts receivable, net | — | — | 90,318 | 63,779 | (77,802 | ) | 76,295 | |||||||||||||||||
Inventories, net | — | — | 44,978 | 2,657 | (525 | ) | 47,110 | |||||||||||||||||
Other receivables | — | 718 | 7,834 | 6,359 | (10,210 | ) | 4,701 | |||||||||||||||||
Prepaid expenses | 9 | — | 12,294 | 187 | (3,222 | ) | 9,268 | |||||||||||||||||
Short-term intercompany loan | — | 95,000 | — | 95,000 | (190,000 | ) | — | |||||||||||||||||
Other current assets | — | 21,487 | 1,518 | 24,679 | (42,885 | ) | 4,799 | |||||||||||||||||
Total current assets | 225 | 117,261 | 168,915 | 196,221 | (324,644 | ) | 157,978 | |||||||||||||||||
Property, plant and equipment, net | — | — | 181,050 | 2,905 | — | 183,955 | ||||||||||||||||||
Intangible assets, net | — | — | 32,744 | 2,148 | — | 34,892 | ||||||||||||||||||
Long-term prepaid expenses | — | — | 24,303 | — | (16,589 | ) | 7,714 | |||||||||||||||||
Investment in subsidiaries | (640,996 | ) | (692,842 | ) | — | (528,647 | ) | 1,862,485 | — | |||||||||||||||
Long-term intercompany loan | — | 800,946 | — | 620,999 | (1,421,945 | ) | — | |||||||||||||||||
Other non-current assets | (1 | ) | — | 4,288 | 10,344 | — | 14,631 | |||||||||||||||||
Total Assets | $ | (640,772 | ) | $ | 225,365 | $ | 411,300 | $ | 303,970 | $ | 99,307 | $ | 399,170 | |||||||||||
Liabilities and Unitholders’ Equity | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 98,767 | $ | 49,193 | $ | (77,802 | ) | $ | 70,158 | |||||||||||
Other accounts payable | 4,257 | 5 | 18,939 | 2,049 | (10,210 | ) | 15,040 | |||||||||||||||||
Accrued expenses | 101 | 23,816 | 35,699 | 21,823 | (42,885 | ) | 38,554 | |||||||||||||||||
Short-term borrowings | — | 95,000 | 95,000 | 95,000 | (190,000 | ) | 95,000 | |||||||||||||||||
Current portion of long-term debt | — | 750,000 | — | — | — | 750,000 | ||||||||||||||||||
Other current liabilities | — | 96 | 1,577 | 5,284 | (3,222 | ) | 3,735 | |||||||||||||||||
Total current liabilities | 4,358 | 868,917 | 249,982 | 173,349 | (324,119 | ) | 972,487 | |||||||||||||||||
Long-term borrowings | — | — | 621,000 | 800,945 | (1,421,945 | ) | — | |||||||||||||||||
Accrued severance benefits, net | — | — | 60,897 | 1,042 | — | 61,939 | ||||||||||||||||||
Other non-current liabilities | — | — | 8,231 | 18,232 | (16,589 | ) | 9,874 | |||||||||||||||||
Total liabilities | 4,358 | 868,917 | 940,110 | 993,568 | (1,762,653 | ) | 1,044,300 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Series A redeemable convertible preferred units | — | — | — | — | — | — | ||||||||||||||||||
Series B redeemable convertible preferred units | 142,669 | — | — | — | — | 142,669 | ||||||||||||||||||
Total redeemable convertible preferred units | 142,669 | — | — | — | — | 142,669 | ||||||||||||||||||
Unitholders’ equity | ||||||||||||||||||||||||
Common units | 52,923 | 136,229 | 39,005 | 51,976 | (227,210 | ) | 52,923 | |||||||||||||||||
Additional paid-in capital | 3,150 | 2,294 | 156,264 | 76,592 | (235,150 | ) | 3,150 | |||||||||||||||||
Accumulated deficit | (995,007 | ) | (933,960 | ) | (872,708 | ) | (970,224 | ) | 2,776,892 | (995,007 | ) | |||||||||||||
Accumulated other comprehensive income | 151,135 | 151,885 | 148,629 | 152,058 | (452,572 | ) | 151,135 | |||||||||||||||||
Total unitholders’ equity | (787,799 | ) | (643,552 | ) | (528,810 | ) | (689,598 | ) | 1,861,960 | (787,799 | ) | |||||||||||||
Total liabilities, redeemable convertible preferred units and unitholders’ equity | $ | (640,772 | ) | $ | 225,365 | $ | 411,300 | $ | 303,970 | $ | 99,307 | $ | 399,170 | |||||||||||
F-81
Table of Contents
For the two-month period ended December 31, 2009
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Net sales | $ | — | $ | — | $ | 112,693 | $ | 32,955 | $ | (34,566 | ) | $ | 111,082 | |||||||||||
Cost of sales | — | — | 93,020 | 27,429 | (30,041 | ) | 90,408 | |||||||||||||||||
Gross profit | — | — | 19,673 | 5,526 | (4,525 | ) | 20,674 | |||||||||||||||||
Selling, general and administrative expenses | (69 | ) | 23 | 13,659 | 1,969 | (1,042 | ) | 14,540 | ||||||||||||||||
Research and development expenses | — | — | 16,048 | 1,710 | (3,017 | ) | 14,741 | |||||||||||||||||
Operating income (loss) from continuing operations | 69 | (23 | ) | (10,034 | ) | 1,847 | (466 | ) | (8,607 | ) | ||||||||||||||
Other income (expenses) | — | 377 | (2,118 | ) | 9,821 | — | 8,080 | |||||||||||||||||
Income (loss) from continuing operations before income taxes, equity in loss of related equity investment | 69 | 354 | (12,152 | ) | 11,668 | (466 | ) | (527 | ) | |||||||||||||||
Income tax expenses (benefits) | — | — | (6 | ) | 1,952 | — | 1,946 | |||||||||||||||||
Income (loss) before equity in loss of related investment | 69 | 354 | (12,146 | ) | 9,716 | (466 | ) | (2,473 | ) | |||||||||||||||
Loss of related investment | (2,032 | ) | (2,225 | ) | — | (11,772 | ) | 16,029 | — | |||||||||||||||
Loss from continuing operations | (1,963 | ) | (1,871 | ) | (12,146 | ) | (2,056 | ) | 15,563 | (2,473 | ) | |||||||||||||
Income from discontinued operation, net of taxes | — | — | 510 | — | — | 510 | ||||||||||||||||||
Net loss | $ | (1,963 | ) | $ | (1,871 | ) | $ | (11,636 | ) | $ | (2,056 | ) | $ | 15,563 | $ | (1,963 | ) | |||||||
Loss from continuing operations attributable to common units | (1,963 | ) | (1,871 | ) | (12,146 | ) | (2,056 | ) | 15,563 | (2,473 | ) | |||||||||||||
Net loss attributable to common units | $ | (1,963 | ) | $ | (1,871 | ) | $ | (11,636 | ) | $ | (2,056 | ) | $ | 15,563 | $ | (1,963 | ) | |||||||
F-82
Table of Contents
For the ten-month period ended October 25, 2009
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Net sales | $ | — | $ | — | $ | 434,896 | $ | 156,813 | $ | (142,725 | ) | $ | 448,984 | |||||||||||
Cost of sales | — | — | 309,151 | 131,162 | (129,174 | ) | 311,139 | |||||||||||||||||
Gross profit | — | — | 125,745 | 25,651 | (13,551 | ) | 137,845 | |||||||||||||||||
Selling, general and administrative expenses | 2,771 | 333 | 47,103 | 10,235 | (4,154 | ) | 56,288 | |||||||||||||||||
Research and development expenses | — | — | 56,597 | 9,596 | (10,045 | ) | 56,148 | |||||||||||||||||
Restructuring and impairment charges | — | — | — | 439 | — | 439 | ||||||||||||||||||
Operating income (loss) from continuing operations | (2,771 | ) | (333 | ) | 22,045 | 5,381 | 648 | 24,970 | ||||||||||||||||
Other income (expenses) | 779,304 | 33,193 | 20,978 | (16,630 | ) | — | 816,845 | |||||||||||||||||
Income (loss) from continuing operations before income taxes, equity in earnings of related equity investment | 776,533 | 32,860 | 43,023 | (11,249 | ) | 648 | 841,815 | |||||||||||||||||
Income tax expenses (benefits) | — | — | (8 | ) | 7,303 | — | 7,295 | |||||||||||||||||
Income (loss) before equity in earnings of related investment | 776,533 | 32,860 | 43,031 | (18,552 | ) | 648 | 834,520 | |||||||||||||||||
Earnings of related investment | 64,573 | 35,283 | — | 51,604 | (151,460 | ) | — | |||||||||||||||||
Income from continuing operations | 841,106 | 68,143 | 43,031 | 33,052 | (150,812 | ) | 834,520 | |||||||||||||||||
Income (loss) from discontinued operation, net of taxes | — | — | 8,586 | (1,557 | ) | (443 | ) | 6,586 | ||||||||||||||||
Net income | $ | 841,106 | $ | 68,143 | $ | 51,617 | $ | 31,495 | $ | (151,255 | ) | $ | 841,106 | |||||||||||
Dividends accrued on preferred units | 6,317 | — | — | — | — | 6,317 | ||||||||||||||||||
Income from continuing operations attributable to common units | 834,789 | 68,143 | 43,031 | 33,052 | (150,812 | ) | 828,203 | |||||||||||||||||
Net income attributable to common units | $ | 834,789 | $ | 68,143 | $ | 51,617 | $ | 31,495 | $ | (151,255 | ) | $ | 834,789 | |||||||||||
F-83
Table of Contents
For the year ended December 31, 2008
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Net sales | $ | — | $ | — | $ | 570,957 | $ | 331,057 | $ | (300,350 | ) | $ | 601,664 | |||||||||||
Cost of sales | — | — | 442,582 | 270,578 | (267,906 | ) | 445,254 | |||||||||||||||||
Gross profit | — | — | 128,375 | 60,479 | (32,444 | ) | 156,410 | |||||||||||||||||
Selling, general and administrative expenses | 4,111 | 1,031 | 64,968 | 12,222 | (1,018 | ) | 81,314 | |||||||||||||||||
Research and development expenses | — | — | 106,182 | 15,734 | (32,461 | ) | 89,455 | |||||||||||||||||
Restructuring and impairment charges | — | — | (875 | ) | 14,245 | — | 13,370 | |||||||||||||||||
Operating income (loss) from continuing operations | (4,111 | ) | (1,031 | ) | (41,900 | ) | 18,278 | 1,035 | (27,729 | ) | ||||||||||||||
Other income (expenses) | — | (29,399 | ) | (269,246 | ) | 12,120 | — | (286,525 | ) | |||||||||||||||
Income (loss) from continuing operations before income taxes, equity in loss of related equity investment | (4,111 | ) | (30,430 | ) | (311,146 | ) | 30,398 | 1,035 | (314,254 | ) | ||||||||||||||
Income tax expenses | — | 175 | 142 | 11,268 | — | 11,585 | ||||||||||||||||||
Income (loss) before equity in loss of related investment | (4,111 | ) | (30,605 | ) | (311,288 | ) | 19,130 | 1,035 | (325,839 | ) | ||||||||||||||
Loss of related investment | (413,183 | ) | (382,574 | ) | — | (380,731 | ) | 1,176,488 | — | |||||||||||||||
Loss from continuing operations | (417,294 | ) | (413,179 | ) | (311,288 | ) | (361,601 | ) | 1,177,523 | (325,839 | ) | |||||||||||||
Loss from discontinued operation, net of taxes | — | — | (69,475 | ) | (21,250 | ) | (730 | ) | (91,455 | ) | ||||||||||||||
Net loss | $ | (417,294 | ) | $ | (413,179 | ) | $ | (380,763 | ) | $ | (382,851 | ) | $ | 1,176,793 | $ | (417,294 | ) | |||||||
Dividends accrued on preferred units | 13,264 | — | — | — | — | 13,264 | ||||||||||||||||||
Loss from continuing operations attributable to common units | (430,558 | ) | (413,179 | ) | (311,288 | ) | (361,601 | ) | 1,177,523 | (339,103 | ) | |||||||||||||
Net loss attributable to common units | $ | (430,558 | ) | $ | (413,179 | ) | $ | (380,763 | ) | $ | (382,851 | ) | $ | 1,176,793 | $ | (430,558 | ) | |||||||
F-84
Table of Contents
For the year ended December 31, 2007
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Net sales | $ | — | $ | — | $ | 687,708 | $ | 320,721 | $ | (298,921 | ) | $ | 709,508 | |||||||||||
Cost of sales | — | — | 574,297 | 277,864 | (273,304 | ) | 578,857 | |||||||||||||||||
Gross profit | — | — | 113,411 | 42,857 | (25,617 | ) | 130,651 | |||||||||||||||||
Selling, general and administrative expenses | 323 | 1,299 | 71,340 | 9,962 | (214 | ) | 82,710 | |||||||||||||||||
Research and development expenses | — | — | 102,760 | 13,473 | (25,428 | ) | 90,805 | |||||||||||||||||
Restructuring and impairment charges | — | — | 12,084 | — | — | 12,084 | ||||||||||||||||||
Operating income (loss) from continuing operations | (323 | ) | (1,299 | ) | (72,773 | ) | 19,422 | 25 | (54,948 | ) | ||||||||||||||
Other income (expenses) | 1 | 8,708 | (57,619 | ) | (16,133 | ) | — | (65,043 | ) | |||||||||||||||
Income (loss) from continuing operations before income taxes, equity in loss of related equity investment | (322 | ) | 7,409 | (130,392 | ) | 3,289 | 25 | (119,991 | ) | |||||||||||||||
Income tax expenses | — | 170 | 156 | 8,509 | — | 8,835 | ||||||||||||||||||
Income (loss) before equity in loss of related investment | (322 | ) | 7,239 | (130,548 | ) | (5,220 | ) | 25 | (128,826 | ) | ||||||||||||||
Loss of related investment | (180,228 | ) | (188,371 | ) | — | (167,234 | ) | 535,833 | — | |||||||||||||||
Loss from continuing operations | (180,550 | ) | (181,132 | ) | (130,548 | ) | (172,454 | ) | 535,858 | (128,826 | ) | |||||||||||||
Loss from discontinued operation, net of taxes | — | — | (36,485 | ) | (14,424 | ) | (815 | ) | (51,724 | ) | ||||||||||||||
Net loss | $ | (180,550 | ) | $ | (181,132 | ) | $ | (167,033 | ) | $ | (186,878 | ) | $ | 535,043 | $ | (180,550 | ) | |||||||
Dividends accrued on preferred units | 12,031 | — | — | — | — | 12,031 | ||||||||||||||||||
Loss from continuing operations attributable to common units | (192,581 | ) | (181,132 | ) | (130,548 | ) | (172,454 | ) | 535,858 | (140,857 | ) | |||||||||||||
Net loss attributable to common units | $ | (192,581 | ) | $ | (181,132 | ) | $ | (167,033 | ) | $ | (186,878 | ) | $ | 535,043 | $ | (192,581 | ) | |||||||
F-85
Table of Contents
For the two-month period ended December 31, 2009
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Cash flow from operating activities | ||||||||||||||||||||||||
Net loss | $ | (1,963 | ) | $ | (1,871 | ) | $ | (11,636 | ) | $ | (2,056 | ) | $ | 15,563 | $ | (1,963 | ) | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 11,168 | 50 | — | 11,218 | ||||||||||||||||||
Provision for severance benefits | — | — | 1,781 | 70 | �� | — | 1,851 | |||||||||||||||||
Loss (gain) on foreign currency translation, net | — | 8,976 | (10,293 | ) | (8,760 | ) | — | (10,077 | ) | |||||||||||||||
Loss on disposal of property, plant and equipment, net | — | — | 17 | — | — | 17 | ||||||||||||||||||
Loss on disposal of intangible assets, net | — | — | 5 | — | — | 5 | ||||||||||||||||||
Unit-based compensation | — | — | 1,993 | 206 | — | 2,199 | ||||||||||||||||||
Cash used for reorganization items | 1,500 | 448 | 1,406 | 909 | — | 4,263 | ||||||||||||||||||
Loss of related investment | 2,032 | 2,225 | — | 11,772 | (16,029 | ) | — | |||||||||||||||||
Other | — | — | (815 | ) | 148 | — | (667 | ) | ||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts receivable | — | — | 4,307 | 6,290 | 5,846 | 16,443 | ||||||||||||||||||
Inventories | — | — | 9,413 | (3,113 | ) | 439 | 6,739 | |||||||||||||||||
Other receivables | — | — | 1,880 | (338 | ) | 213 | 1,755 | |||||||||||||||||
Deferred tax assets | — | — | — | 664 | 14 | 678 | ||||||||||||||||||
Accounts payable | — | — | (12,074 | ) | 3,750 | (5,820 | ) | (14,144 | ) | |||||||||||||||
Other accounts payable | (129 | ) | 2 | (10,860 | ) | (1,311 | ) | (213 | ) | (12,511 | ) | |||||||||||||
Accrued expenses | (1,847 | ) | 337 | 5,058 | 9,806 | (19,041 | ) | (5,687 | ) | |||||||||||||||
Long term other payable | — | — | — | (48 | ) | (829 | ) | (877 | ) | |||||||||||||||
Other current assets | 13 | (9,678 | ) | 3,787 | (9,308 | ) | 18,378 | 3,192 | ||||||||||||||||
Other current liabilities | — | — | 405 | (704 | ) | 1,487 | 1,188 | |||||||||||||||||
Payment of severance benefits | — | — | (1,331 | ) | (58 | ) | — | (1,389 | ) | |||||||||||||||
Other | — | — | (127 | ) | (4 | ) | 6 | (125 | ) | |||||||||||||||
Net cash provided by (used in) operating activities before reorganization items | (394 | ) | 439 | (5,916 | ) | 7,965 | 14 | 2,108 | ||||||||||||||||
Cash used for reorganization items | (1,500 | ) | (448 | ) | (1,406 | ) | (909 | ) | — | (4,263 | ) | |||||||||||||
Net cash provided by (used in) operating activities | (1,894 | ) | (9 | ) | (7,322 | ) | 7,056 | 14 | (2,155 | ) | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Proceeds from disposal of plant, property and equipment | — | — | 37 | — | — | 37 | ||||||||||||||||||
Purchases of plant, property and equipment | — | — | (1,254 | ) | (1 | ) | (3 | ) | (1,258 | ) | ||||||||||||||
Payment for intellectual property registration | — | — | (70 | ) | — | — | (70 | ) | ||||||||||||||||
Purchase of short-term financial instruments | — | — | — | (329 | ) | — | (329 | ) | ||||||||||||||||
Other | — | — | 20 | 3 | — | 23 | ||||||||||||||||||
Net cash used in investing activities | — | — | (1,267 | ) | (327 | ) | (3 | ) | (1,597 | ) | ||||||||||||||
Cash flow from financing activities | ||||||||||||||||||||||||
Net cash provided by (used in) financing activities | — | — | — | — | — | — | ||||||||||||||||||
Effect of exchanges rate on cash and cash equivalents | — | — | 1,261 | (152 | ) | (11 | ) | 1,098 | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (1,894 | ) | (9 | ) | (7,328 | ) | 6,577 | — | (2,654 | ) | ||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||
Beginning of the period | 2,030 | 33 | 52,771 | 12,745 | — | 67,579 | ||||||||||||||||||
End of the period | $ | 136 | $ | 24 | $ | 45,443 | $ | 19,322 | $ | — | $ | 64,925 | ||||||||||||
F-86
Table of Contents
For the ten-month period ended October 25, 2009
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Cash flow from operating activities | ||||||||||||||||||||||||
Net income | $ | 841,106 | $ | 68,143 | $ | 51,617 | $ | 31,495 | $ | (151,255 | ) | $ | 841,106 | |||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 36,274 | 1,981 | — | 38,255 | ||||||||||||||||||
Provision for severance benefits | — | — | 8,512 | 323 | — | 8,835 | ||||||||||||||||||
Amortization of debt issuance costs | — | 685 | 151 | — | — | 836 | ||||||||||||||||||
Loss (gain) on foreign currency translation, net | — | (14,384 | ) | (43,701 | ) | 13,861 | — | (44,224 | ) | |||||||||||||||
Loss (gain) on disposal of property, plant and equipment, net | — | — | (235 | ) | 330 | — | 95 | |||||||||||||||||
Gain on disposal of intangible assets, net | — | — | (9,230 | ) | — | — | (9,230 | ) | ||||||||||||||||
Restructuring and impairment charges | — | — | (1,120 | ) | — | — | (1,120 | ) | ||||||||||||||||
Unit-based compensation | — | — | 210 | 23 | — | 233 | ||||||||||||||||||
Cash used for reorganization items | — | 16 | — | 1,060 | — | 1,076 | ||||||||||||||||||
Noncash reorganization items | (779,304 | ) | 508 | (31,026 | ) | 4,173 | — | (805,649 | ) | |||||||||||||||
Earnings of related investment | (64,573 | ) | (35,283 | ) | — | (51,604 | ) | 151,460 | — | |||||||||||||||
Other | — | — | 1,877 | 845 | — | 2,722 | ||||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts receivable | — | — | (34,658 | ) | (9,735 | ) | 31,463 | (12,930 | ) | |||||||||||||||
Inventories | — | — | (2,421 | ) | 1,479 | (221 | ) | (1,163 | ) | |||||||||||||||
Other receivables | — | — | (1,174 | ) | 2,894 | (1,689 | ) | 31 | ||||||||||||||||
Deferred tax assets | — | — | — | 1,054 | — | 1,054 | ||||||||||||||||||
Accounts payable | — | — | 22,745 | 14,984 | (31,413 | ) | 6,316 | |||||||||||||||||
Other accounts payable | 2,622 | 260 | (17,303 | ) | 1,280 | 1,689 | (11,452 | ) | ||||||||||||||||
Accrued expenses | (27 | ) | 22,395 | 45,513 | 41,324 | (80,910 | ) | 28,295 | ||||||||||||||||
Long term other payable | — | — | 626 | 412 | (531 | ) | 507 | |||||||||||||||||
Other current assets | (40 | ) | (42,252 | ) | 11,842 | (39,412 | ) | 75,758 | 5,896 | |||||||||||||||
Other current liabilities | — | (95 | ) | 725 | (6,098 | ) | 5,507 | 39 | ||||||||||||||||
Payment of severance benefits | — | — | (4,010 | ) | (310 | ) | — | (4,320 | ) | |||||||||||||||
Other | — | — | (520 | ) | 1,098 | (1,094 | ) | (516 | ) | |||||||||||||||
Net cash provided by (used in) operating activities before reorganization items | (216 | ) | (7 | ) | 34,694 | 11,457 | (1,236 | ) | 44,692 | |||||||||||||||
Cash used for reorganization items | — | (16 | ) | — | (1,060 | ) | — | (1,076 | ) | |||||||||||||||
Net cash provided by (used in) operating activities | (216 | ) | (23 | ) | 34,694 | 10,397 | (1,236 | ) | 43,616 | |||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Proceeds from disposal of plant, property and equipment | — | — | 290 | 299 | (260 | ) | 329 | |||||||||||||||||
Proceeds from disposal of intangible assets | — | — | 9,374 | 1 | — | 9,375 | ||||||||||||||||||
Purchases of plant, property and equipment | — | — | (7,753 | ) | (20 | ) | 260 | (7,513 | ) | |||||||||||||||
Payment for intellectual property registration | — | — | (366 | ) | — | — | (366 | ) | ||||||||||||||||
Decrease in restricted cash | — | — | 11,409 | — | — | 11,409 | ||||||||||||||||||
Other | — | — | (282 | ) | 1,949 | (1,763 | ) | (96 | ) | |||||||||||||||
Net cash provided by investing activities | — | — | 12,672 | 2,229 | (1,763 | ) | 13,138 | |||||||||||||||||
Cash flow from financing activities | ||||||||||||||||||||||||
Issuance of new common units pursuant to the reorganization plan | 35,280 | — | — | — | — | 35,280 | ||||||||||||||||||
Repayment of short-term borrowings | (33,250 | ) | — | — | — | — | (33,250 | ) | ||||||||||||||||
Repayment of long-term borrowings | — | — | — | (1,763 | ) | 1,763 | — | |||||||||||||||||
Net cash provided by (used in) financing activities | 2,030 | — | — | (1,763 | ) | 1,763 | 2,030 | |||||||||||||||||
Effect of exchange rates on cash and cash equivalents | — | — | 5,200 | (1,678 | ) | 1,236 | 4,758 | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 1,814 | (23 | ) | 52,566 | 9,185 | — | 63,542 | |||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||
Beginning of the period | 216 | 56 | 205 | 3,560 | — | 4,037 | ||||||||||||||||||
End of the period | $ | 2,030 | $ | 33 | $ | 52,771 | $ | 12,745 | $ | — | $ | 67,579 | ||||||||||||
F-87
Table of Contents
For the year ended December 31, 2008
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Cash flow from operating activities | ||||||||||||||||||||||||
Net loss | $ | (417,294 | ) | $ | (413,179 | ) | $ | (380,763 | ) | $ | (382,851 | ) | $ | 1,176,793 | $ | (417,294 | ) | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 68,698 | 3,262 | — | 71,960 | ||||||||||||||||||
Provision for severance benefits | — | — | 13,552 | 474 | — | 14,026 | ||||||||||||||||||
Amortization of debt issuance costs | — | 13,079 | 3,211 | — | — | 16,290 | ||||||||||||||||||
Loss (gain) on foreign currency translation, net | — | 8,808 | 212,287 | (5,524 | ) | — | 215,571 | |||||||||||||||||
Loss (gain) on disposal of property, plant and equipment, net | — | — | (3,095 | ) | 1 | — | (3,094 | ) | ||||||||||||||||
Restructuring and impairment charges | — | — | 25,420 | 17,119 | — | 42,539 | ||||||||||||||||||
Unit-based compensation | 16 | — | 375 | 74 | — | 465 | ||||||||||||||||||
Loss of related investment | 413,183 | 382,574 | — | 380,731 | (1,176,488 | ) | — | |||||||||||||||||
Other | — | 1 | (773 | ) | 372 | — | (400 | ) | ||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts receivables | — | — | 21,089 | 7,602 | 2,334 | 31,025 | ||||||||||||||||||
Inventories | — | — | 9,157 | 2,169 | (152 | ) | 11,174 | |||||||||||||||||
Other receivables | — | — | (2,073 | ) | 6,373 | (3,284 | ) | 1,016 | ||||||||||||||||
Deferred tax assets | — | — | — | 1,462 | 28 | 1,490 | ||||||||||||||||||
Accounts payable | — | — | 15,478 | (18,207 | ) | (2,334 | ) | (5,063 | ) | |||||||||||||||
Other accounts payable | 3,238 | — | (25,092 | ) | (1,317 | ) | 3,284 | (19,887 | ) | |||||||||||||||
Accrued expenses | 101 | 20,428 | 22,857 | 12,619 | (32,052 | ) | 23,953 | |||||||||||||||||
Long term other payable | — | — | (331 | ) | 450 | 2 | 121 | |||||||||||||||||
Other current assets | 1,122 | (12,623 | ) | 8,671 | (18,870 | ) | 29,101 | 7,401 | ||||||||||||||||
Other current liabilities | — | (408 | ) | (1,537 | ) | 179 | 3,061 | 1,295 | ||||||||||||||||
Payment of severance benefits | — | — | (6,432 | ) | (73 | ) | — | (6,505 | ) | |||||||||||||||
Other | — | 128 | (4,948 | ) | (8,323 | ) | 8,672 | (4,471 | ) | |||||||||||||||
Net cash provided by (used in) operating activities | 366 | (1,192 | ) | (24,249 | ) | (2,278 | ) | 8,965 | (18,388 | ) | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Proceeds from disposal of plant, property and equipment | — | — | 3,122 | — | — | 3,122 | ||||||||||||||||||
Purchases of plant, property and equipment | — | — | (26,772 | ) | (1,836 | ) | — | (28,608 | ) | |||||||||||||||
Payment for intellectual property registration | — | — | (791 | ) | (261 | ) | — | (1,052 | ) | |||||||||||||||
Increase in restricted cash | — | — | (13,517 | ) | — | — | (13,517 | ) | ||||||||||||||||
Other | — | (45,000 | ) | 550 | (45,066 | ) | 90,000 | 484 | ||||||||||||||||
Net cash used in investing activities | — | (45,000 | ) | (37,408 | ) | (47,163 | ) | 90,000 | (39,571 | ) | ||||||||||||||
Cash flow from financing activities | ||||||||||||||||||||||||
Proceeds from short-term borrowings | — | 175,000 | 155,000 | 150,000 | (300,000 | ) | 180,000 | |||||||||||||||||
Issuance of old common units | 183 | — | — | — | — | 183 | ||||||||||||||||||
Repayment of short-term borrowings | — | (160,000 | ) | (110,000 | ) | (105,000 | ) | 210,000 | (165,000 | ) | ||||||||||||||
Repurchase of old common units | (496 | ) | — | — | — | — | (496 | ) | ||||||||||||||||
Net cash provided by (used in) financing activities | (313 | ) | 15,000 | 45,000 | 45,000 | (90,000 | ) | 14,687 | ||||||||||||||||
Effect of exchanges rate on cash and cash equivalents | — | — | (7,439 | ) | (632 | ) | (8,965 | ) | (17,036 | ) | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | 53 | (31,192 | ) | (24,096 | ) | (5,073 | ) | — | (60,308 | ) | ||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||
Beginning of the year | 163 | 31,248 | 24,301 | 8,633 | — | 64,345 | ||||||||||||||||||
End of the year | $ | 216 | $ | 56 | $ | 205 | $ | 3,560 | $ | — | $ | 4,037 | ||||||||||||
F-88
Table of Contents
For the year ended December 31, 2007
MagnaChip | ||||||||||||||||||||||||
Semiconductor | Non- | |||||||||||||||||||||||
LLC (Parent) | Co-Issuers | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Cash flow from operating activities | ||||||||||||||||||||||||
Net loss | $ | (180,550 | ) | $ | (181,132 | ) | $ | (167,033 | ) | $ | (186,878 | ) | $ | 535,043 | $ | (180,550 | ) | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 158,925 | 4,509 | — | 163,434 | ||||||||||||||||||
Provision for severance benefits | — | — | 18,672 | 162 | — | 18,834 | ||||||||||||||||||
Amortization of debt issuance costs | — | 2,931 | 988 | — | — | 3,919 | ||||||||||||||||||
Loss (gain) on foreign currency translation, net | — | (18,106 | ) | 4,492 | 19,012 | — | 5,398 | |||||||||||||||||
Loss (gain) on disposal of property, plant and equipment, net | — | — | (89 | ) | 21 | — | (68 | ) | ||||||||||||||||
Restructuring and impairment charges | — | — | 10,106 | — | — | 10,106 | ||||||||||||||||||
Unit-based compensation | 71 | — | 474 | 59 | — | 604 | ||||||||||||||||||
Loss of related investment | 180,228 | 188,371 | — | 167,234 | (535,833 | ) | — | |||||||||||||||||
Gain on disposal of intangible assets, net | — | — | (3,630 | ) | — | — | (3,630 | ) | ||||||||||||||||
Other | — | — | (39 | ) | 90 | — | 51 | |||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts receivables | — | — | (45,205 | ) | (31,973 | ) | 30,674 | (46,504 | ) | |||||||||||||||
Inventories | — | — | (16,720 | ) | (2,303 | ) | 625 | (18,398 | ) | |||||||||||||||
Other receivables | — | — | (651 | ) | 15,469 | (13,847 | ) | 971 | ||||||||||||||||
Deferred tax assets | — | — | — | 952 | — | 952 | ||||||||||||||||||
Accounts payable | — | — | 34,108 | 23,008 | (30,674 | ) | 26,442 | |||||||||||||||||
Other accounts payable | 1,020 | — | (16,455 | ) | (4,433 | ) | 13,847 | (6,021 | ) | |||||||||||||||
Accrued expenses | — | 254 | (5,540 | ) | (7,833 | ) | 7,615 | (5,504 | ) | |||||||||||||||
Long term other payable | — | — | 170 | (56 | ) | — | 114 | |||||||||||||||||
Other current assets | (1,072 | ) | 7,816 | 12,673 | 1,336 | (10,913 | ) | 9,840 | ||||||||||||||||
Other current liabilities | — | 170 | 1,891 | (354 | ) | 3,300 | 5,007 | |||||||||||||||||
Payment of severance benefits | — | — | (7,151 | ) | — | — | (7,151 | ) | ||||||||||||||||
Other | — | 52 | (347 | ) | (3,043 | ) | 1,781 | (1,557 | ) | |||||||||||||||
Net cash provided by (used in) operating activities | (303 | ) | 356 | (20,361 | ) | (5,021 | ) | 1,618 | (23,711 | ) | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Purchases of plant, property and equipment | — | — | (82,561 | ) | (2,733 | ) | — | (85,294 | ) | |||||||||||||||
Payment for intellectual property registration | — | — | (1,411 | ) | (40 | ) | 195 | (1,256 | ) | |||||||||||||||
Proceeds from disposal of plant, property and equipment | — | — | 791 | (427 | ) | — | 364 | |||||||||||||||||
Proceeds from disposal of intangible assets | — | — | 4,204 | — | — | 4,204 | ||||||||||||||||||
Other | — | (50,000 | ) | 827 | (50,651 | ) | 100,000 | 176 | ||||||||||||||||
Net cash used in investing activities | — | (50,000 | ) | (78,150 | ) | (53,851 | ) | 100,195 | (81,806 | ) | ||||||||||||||
Cash flow from financing activities | ||||||||||||||||||||||||
Issuance of old common units | 151 | — | — | — | — | 151 | ||||||||||||||||||
Repurchase of old common units | (6 | ) | — | — | — | — | (6 | ) | ||||||||||||||||
Proceeds from short-term borrowings | — | 120,000 | 60,100 | 50,000 | (100,000 | ) | 130,100 | |||||||||||||||||
Repayment of short-term borrowings | — | (40,000 | ) | (10,100 | ) | — | — | (50,100 | ) | |||||||||||||||
Net cash provided by financing activities | 145 | 80,000 | 50,000 | 50,000 | (100,000 | ) | 80,145 | |||||||||||||||||
Effect of exchange rates on cash and cash equivalents | — | — | 204 | 2,153 | (1,813 | ) | 544 | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (158 | ) | 30,356 | (48,307 | ) | (6,719 | ) | — | (24,828 | ) | ||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||
Beginning of the year | 321 | 892 | 72,608 | 15,352 | — | 89,173 | ||||||||||||||||||
End of the year | $ | 163 | $ | 31,248 | $ | 24,301 | $ | 8,633 | $ | — | $ | 64,345 | ||||||||||||
F-89
Table of Contents
MagnaChip Semiconductor Finance Company
Which have been registered under the Securities Act of 1933
For any and all outstanding 10.500% Second Notes due 2018 and related Guarantees
Table of Contents
Item 20. | Indemnification of Directors and Officers |
II-1
Table of Contents
Item 21. | Exhibits. |
2 | .1 | Second Amended Chapter 11 Plan of Reorganization Proposed by the Official Committee of Unsecured Creditors of MagnaChip Semiconductor Finance Company, et al., dated as of September 24, 2009(1) | ||
3 | .1 | Certificate of Formation of MagnaChip Semiconductor LLC (formerly System Semiconductor Holding LLC)(1) | ||
3 | .2 | Certificate of Amendment to Certificate of Formation of MagnaChip Semiconductor LLC(1) | ||
3 | .3 | Fifth Amended and Restated Limited Liability Company Operating Agreement of MagnaChip Semiconductor LLC(1) | ||
3 | .4 | Articles of Incorporation of MagnaChip Semiconductor S.A. | ||
3 | .5 | Certificate of Incorporation of MagnaChip Semiconductor Finance Company | ||
3 | .6 | Bylaws of MagnaChip Semiconductor Finance Company |
II-2
Table of Contents
3 | .7 | Certificate of Formation for MagnaChip Semiconductor SA Holdings LLC | ||
3 | .8 | Amended and Restated Limited Liability Company Agreement of MagnaChip Semiconductor SA Holdings LLC (USA) | ||
3 | .9 | Deed of Amendment to the Articles of Association of MagnaChip Semiconductor B.V. (English translation) | ||
3 | .10 | Articles of Incorporation of MagnaChip Semiconductor, Inc. (USA) contained in the Agreement and Plan of Merger by and between IC Media Corporation and MagnaChip Semiconductor, Inc. (USA) | ||
3 | .11 | Bylaws of MagnaChip Semiconductor, Inc. (USA), as amended (formerly IC Media Corporation) | ||
3 | .12 | Articles of Incorporation of MagnaChip Semiconductor Inc. (Japan) (English translation) | ||
3 | .13 | Memorandum of Association of MagnaChip Semiconductor Limited (Hong Kong) | ||
3 | .14 | Articles of Association of MagnaChip Semiconductor Limited (Hong Kong) | ||
3 | .15 | Memorandum of Association of MagnaChip Semiconductor Limited (United Kingdom) | ||
3 | .16 | Articles of Association of MagnaChip Semiconductor Limited (United Kingdom) | ||
3 | .17 | Articles of Incorporation of MagnaChip Semiconductor Limited (Taiwan) (English translation) | ||
3 | .18 | Memorandum of Association of MagnaChip Semiconductor Holding Company Limited, as amended (British Virgin Islands) (formerly IC Media Holding Company Limited) | ||
3 | .19 | Articles of Association of MagnaChip Semiconductor Holding Company Limited, as amended (British Virgin Islands) (formerly IC Media Holding Company Limited) | ||
4 | .1 | Registration Rights Agreement, dated as of November 9, 2009, by and among MagnaChip Semiconductor LLC and each of the securityholders named therein(1) | ||
4 | .2 | [reserved] | ||
4 | .3 | [reserved] | ||
4 | .4 | Indenture, dated as of April 9, 2010, by and among MagnaChip Semiconductor S.A., MagnaChip Semiconductor Finance Company, the guarantors as named therein and Wilmington Trust FSB, as trustee(1) | ||
4 | .5 | Form of 10.500% Senior Notes due 2018 and notation of guarantee (included in Exhibit 4.4) | ||
4 | .6 | Exchange and Registration Rights Agreement, dated as of April 9, 2010, by and among MagnaChip Semiconductor S.A., MagnaChip Semiconductor Finance Company, the guarantors named therein, and Goldman, Sachs & Co., Barclays Capital Inc., Deutsche Bank Securities Inc. and Morgan Stanley & Co. Incorporated, as representatives of the several purchasers named therein(1) | ||
5 | .1 | Opinion of Jones Day* | ||
5 | .2 | Opinion of Dechert Luxembourg* | ||
5 | .3 | Opinion of NautaDutilh N.V.* | ||
5 | .4 | Opinion of DLA Piper Tokyo Partnership* | ||
5 | .5 | Opinion of DLA Piper Hong Kong* | ||
5 | .6 | Opinion of Lee, Tsai & Partners* | ||
5 | .7 | Opinion of DLA Piper UK LLP* | ||
5 | .8 | Opinion of Harney Westwood & Riegels* | ||
10 | .1 | Amended and Restated Credit Agreement, dated as of November 6, 2009, among MagnaChip Semiconductor S.A., MagnaChip Semiconductor Finance Company, the guarantors named therein, the lenders named therein, and Wilmington Trust FSB, as Administrative Agent(1) | ||
10 | .2 | Intellectual Property License Agreement, dated as of October 6, 2004, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1) | ||
10 | .3 | Land Lease and Easement Agreement, dated as of October 6, 2004, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1)(2) | ||
10 | .4 | First Amendment to Land Lease and Easement Agreement, dated as of December 30, 2005, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1) | ||
10 | .5 | General Service Supply Agreement, dated as of October 6, 2004, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1)(3) |
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10 | .6 | First Amendment to the General Service Supply Agreement, dated as of December 30, 2005, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1) | ||
10 | .7 | License Agreement (ModularBCD), dated as of March 18, 2005, by and between Advanced Analogic Technologies, Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1)(2) | ||
10 | .8 | Amended & Restated License Agreement (TrenchDMOS), dated as of September 19, 2007, by and between Advanced Analogic Technologies, Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1)(3) | ||
10 | .9 | Technology License Agreement, dated as of December 16, 1996, by and between Advanced RISC Machines Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to LG Semicon Company Limited)(1)(2) | ||
10 | .10 | Amendment to the Technology License Agreement, dated as of October 16, 2006, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea)(1)(3) | ||
10 | .11 | ARM7201TDSP Device License Agreement, dated as of August 26, 1997, by and between Advanced RISC Machines Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to LG Semicon Company Limited)(1)(2) | ||
10 | .12 | Technology License Agreement, dated as of October 5, 1995, by and between Advanced RISC Machines Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to LG Semicon Company Limited)(1)(3) | ||
10 | .13 | Technology License Agreement, dated as of July 2001, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to Hynix Semiconductor Inc.)(1)(2) | ||
10 | .14 | Technology License Agreement, dated as of August 22, 2001, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to Hynix Semiconductor Inc.)(1)(2) | ||
10 | .15 | Technology License Agreement, dated as of May 20, 2004, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to Hynix Semiconductor Inc.)(1) | ||
10 | .16 | Design Migration Agreement, dated as of May 1, 2007, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea)(1)(3) | ||
10 | .17 | Basic Agreement on Joint Development and Grant of License, dated as of November 10, 2006, by and between MagnaChip Semiconductor, Ltd. and Silicon Works (English translation)(1) | ||
10 | .18 | Master Service Agreement, dated as of December 27, 2000, by and between Sharp Corporation and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to Hyundai Electronics Japan Co., Ltd) (English translation)(1) | ||
10 | .19 | Warrant Agreement, dated as of November 9, 2009, between MagnaChip Semiconductor LLC and American Stock Transfer & Trust Company, LLC(1) | ||
10 | .20 | MagnaChip Semiconductor LLC 2009 Common Unit Plan(1) | ||
10 | .21 | MagnaChip Semiconductor LLC 2009 Common Unit Plan form of Option Agreement (Non-U.S. Participants)(1) | ||
10 | .22 | MagnaChip Semiconductor LLC 2009 Common Unit Plan form of Option Agreement (U.S. Participants)(1) | ||
10 | .23 | MagnaChip Semiconductor LLC 2009 Common Unit Plan form of Restricted Unit Agreement (Non-U.S. Participants)(1) | ||
10 | .24 | MagnaChip Semiconductor LLC 2009 Common Unit Plan form of Restricted Unit Agreement (U.S. Participants)(1) | ||
10 | .25 | MagnaChip Semiconductor Corporation 2010 Equity Incentive Plan(1) | ||
10 | .26 | MagnaChip Semiconductor Corporation 2010 Employee Stock Purchase Plan(1) | ||
10 | .27 | Amended and Restated Service Agreement, dated as of May 8, 2008, by and between MagnaChip Semiconductor, Ltd. (Korea) and Sang Park(1) | ||
10 | .28 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Sang Park(1) |
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10 | .29 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Sang Park(1) | ||
10 | .30 | Entrustment Agreement, dated as of October 6, 2004, by and between MagnaChip Semiconductor, Ltd. (Korea) and Tae Young Hwang(1) | ||
10 | .31 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Tae Young Hwang(1) | ||
10 | .32 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Tae Young Hwang(1) | ||
10 | .33 | Offer Letter dated March 7, 2006, from MagnaChip Semiconductor LLC and MagnaChip Semiconductor, Inc. to Brent Rowe, as supplemented on December 20, 2006(1) | ||
10 | .34 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Brent Rowe(1) | ||
10 | .35 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Brent Rowe(1) | ||
10 | .36 | Offer Letter dated September 5, 2006, from MagnaChip Semiconductor LLC and MagnaChip Semiconductor, Ltd. to Margaret Sakai(1) | ||
10 | .37 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Margaret Sakai(1) | ||
10 | .38 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Margaret Sakai(1) | ||
10 | .39 | Offer Letter, dated as of July 1, 2007, by and between MagnaChip Semiconductor, Ltd. (Korea) and Heung Kyu Kim(1) | ||
10 | .40 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Heung Kyu Kim(1) | ||
10 | .41 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Heung Kyu Kim(1) | ||
10 | .42 | Offer Letter, dated as of June 20, 2007, by and between MagnaChip Semiconductor, Ltd. (Korea) and Tae Jong Lee(1) | ||
10 | .43 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Tae Jong Lee(1) | ||
10 | .44 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Tae Jong Lee(1) | ||
10 | .45 | Service Agreement, dated as of April 1, 2006, by and between MagnaChip Semiconductor, Ltd. (Korea) and John McFarland(1) | ||
10 | .46 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and John McFarland(1) | ||
10 | .47 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and John McFarland(1) | ||
10 | .48 | Senior Advisor Agreement, dated as of April 10, 2009, by and between MagnaChip Semiconductor, Ltd.(Korea) and Robert J. Krakauer(1) | ||
10 | .49 | MagnaChip Semiconductor LLC Form of Indemnification Agreement with Directors | ||
10 | .50 | Form of Accredited Investor Certification delivered to the Official Committee of Unsecured Creditors of MagnaChip Semiconductor Finance Company, et al.(1) | ||
10 | .51 | Form of Subscription Agreement for common units of MagnaChip Semiconductor LLC (in connection with the Committee’s Plan of Reorganization under Chapter 11 of the Bankruptcy Code)(1) | ||
10 | .52 | Subscription Form for Rights Offering in connection with the Committee’s Plan of Reorganization under Chapter 11 of the Bankruptcy Code(1) |
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10 | .53 | $35,000,000 Common Unit Backstop Commitment letter, dated as of September 23, 2009, from Avenue Capital Management II, L.P., solely in its capacity as investment advisor to Avenue Investments, L.P., Avenue International Master, L.P., Avenue Special Situations Fund IV, L.P., Avenue Special Situations Fund V, L.P. and Avenue CDP-Global Opportunities Fund, L.P. (included in Exhibit 2.1) | ||
10 | .54 | MagnaChip Semiconductor LLC Profit Sharing Plan as adopted on December 31, 2009 and as amended on February 15, 2010(1)(3) | ||
12 | .1 | Statement Regarding Computation of Ratio of Earnings to Fixed Charges | ||
21 | .1 | Subsidiaries of MagnaChip Semiconductor LLC(1) | ||
23 | .1 | Consent of Samil PricewaterhouseCoopers | ||
23 | .2 | Consent of Jones Day (contained in Exhibit 5.1)* | ||
23 | .3 | Consent of Dechert Luxembourg (contained in Exhibit 5.2)* | ||
23 | .4 | Consent of NautaDutilh N.V. (contained in Exhibit 5.3)* | ||
23 | .5 | Consent of DLA Piper Tokyo Partnership (contained in Exhibit 5.4)* | ||
23 | .6 | Consent of DLA Piper Hong Kong (contained in Exhibit 5.5)* | ||
23 | .7 | Consent of Lee, Tsai & Partners (contained in Exhibit 5.6)* | ||
23 | .8 | Consent of DLA Piper UK LLP (contained in Exhibit 5.7)* | ||
23 | .9 | Consent of Harney Westwood & Riegels (contained in Exhibit 5.8)* | ||
24 | .1 | Powers of Attorney (included on signature pages hereof) | ||
25 | .1 | Statement of Eligibility of the Trustee on Form T-1 under the Trust Indenture Act | ||
99 | .1 | Form of Letter of Transmittal | ||
99 | .2 | Form of Notice of Guaranteed Delivery | ||
99 | .3 | Form of Letter to Brokers, Dealers and Other Nominees | ||
99 | .4 | Form of Letter to Beneficial Owners Regarding Offer to Exchange |
* | To be filed by amendment. |
(1) | Incorporated by reference to the respective exhibits to MagnaChip Semiconductor LLC’s Registration Statement onForm S-1 (RegistrationNo. 333-165467) initially filed on March 15, 2010, as amended. | |
(2) | Certain portions of this document have been omitted pursuant to a grant of confidential treatment by the SEC. | |
(3) | Certain portions of this document have been omitted pursuant to a request for confidential treatment by the SEC. |
Item 17. | Undertakings. |
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By: | /s/ Sang Park |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Sang Park Sang Park | Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) | August 4, 2010 | ||||
/s/ Margaret Sakai Margaret Sakai | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | August 4, 2010 | ||||
/s/ Michael Elkins Michael Elkins | Director | August 4, 2010 | ||||
/s/ Randal Klein Randal Klein | Director | August 4, 2010 | ||||
/s/ R. Douglas Norby R. Douglas Norby | Director | August 4, 2010 |
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Signature | Title | Date | ||||
/s/ Gidu Shroff Gidu Shroff | Director | August 4, 2010 | ||||
/s/ Steven Tan Steven Tan | Director | August 4, 2010 | ||||
/s/ Nader Tavakoli Nader Tavakoli | Director | August 4, 2010 |
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By: | /s/ Margaret Sakai |
Signature | Title | Date | ||||
/s/ Margaret Sakai Margaret Sakai | Chief Financial Officer (Principal Financial Officer and Principal Accounting) | August 4, 2010 | ||||
/s/ Michael Elkins Michael Elkins | Director | August 4, 2010 | ||||
/s/ Randal Klein Randal Klein | Director | August 4, 2010 | ||||
/s/ John McFarland John McFarland | Director | August 4, 2010 |
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By: | /s/ John McFarland |
Title: | Director |
Signature | Title | Date | ||||
/s/ Michael Elkins Michael Elkins | Director | August 4, 2010 | ||||
/s/ Randal Klein Randal Klein | Director | August 4, 2010 | ||||
/s/ John McFarland John McFarland | Director and Authorized Representative in the United States | August 4, 2010 |
II-11
Table of Contents
By: | /s/ Margaret Sakai |
Title: | Chief Financial Officer |
Signature | Title | Date | ||||
/s/ Margaret Sakai Margaret Sakai | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | August 4, 2010 | ||||
/s/ Michael Elkins Michael Elkins | Director | August 4, 2010 | ||||
/s/ Randal Klein Randal Klein | Director | August 4, 2010 | ||||
/s/ John McFarland John McFarland | Director | August 4, 2010 |
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By: | /s/ John McFarland |
Title: | Authorized Representative |
Signature | Title | Date | ||||
/s/ Margaret Sakai Margaret Sakai | Authorized Representative and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | August 4, 2010 | ||||
/s/ Stefan Boermans Stefan Boermans | Director | August 4, 2010 | ||||
/s/ Anne-Marie Kuijpers Anne-Marie Kuijpers | Director | August 4, 2010 | ||||
/s/ John McFarland John McFarland | Authorized Representative in the United States | August 4, 2010 |
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By: | /s/ Margaret Sakai |
Title: | Chief Financial Officer and Treasurer |
Signature | Title | Date | ||||
/s/ Brent Rowe Brent Rowe | Director and President (Principal Executive Officer) | August 4, 2010 | ||||
/s/ Margaret Sakai Margaret Sakai | Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) | August 4, 2010 | ||||
/s/ Andrew Brown Andrew Brown | Director | August 4, 2010 |
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(UNITED KINGDOM)
By: | /s/ John McFarland |
Title: | Company Secretary |
By: | /s/ Brent Rowe |
Title: | Director |
Signature | Title | Date | ||||
/s/ John McFarland John McFarland | Company Secretary and Authorized Representative in the United States | August 4, 2010 | ||||
/s/ Brent Rowe Brent Rowe | Director | August 4, 2010 | ||||
/s/ Andrew Brown Andrew Brown | Director | August 4, 2010 |
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(HONG KONG)
By: | /s/ Margaret Sakai |
Title: | Director |
Signature | Title | Date | ||||
/s/ Margaret Sakai Margaret Sakai | Director, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Authorized Representative in the United States | August 4, 2010 | ||||
/s/ Jong Soo Choi Jong Soo Choi | Director | August 4, 2010 |
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By: | /s/ Margaret Sakai |
Title: | Director |
Signature | Title | Date | ||||
/s/ Margaret Sakai Margaret Sakai | Director and Authorized Representative in the United States | August 4, 2010 | ||||
/s/ Jong Soo Choi Jong Soo Choi | Director | August 4, 2010 |
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By: | /s/ Margaret Sakai |
Title: | Director |
Signature | Title | Date | ||||
/s/ Taeyoung Hwang Taeyoung Hwang | Co-Representative Director | August 4, 2010 | ||||
/s/ Yoshio Imamura Yoshio Imamura | Co-Representative Director | August 4, 2010 | ||||
/s/ Margaret Sakai Margaret Sakai | Director | August 4, 2010 | ||||
/s/ John McFarland John McFarland | Statutory Auditor and Authorized Representative in the United States | August 4, 2010 |
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By: | /s/ Margaret Sakai |
Title: | Chief Financial Officer |
Signature | Title | Date | ||||
/s/ Margaret Sakai Margaret Sakai | Director and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | August 4, 2010 | ||||
/s/ Brent Rowe Brent Rowe | Director | August 4, 2010 | ||||
/s/ John McFarland John McFarland | Director and Authorized Representative in the United States | August 4, 2010 |
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2 | .1 | Second Amended Chapter 11 Plan of Reorganization Proposed by the Official Committee of Unsecured Creditors of MagnaChip Semiconductor Finance Company, et al., dated as of September 24, 2009(1) | ||
3 | .1 | Certificate of Formation of MagnaChip Semiconductor LLC (formerly System Semiconductor Holding LLC)(1) | ||
3 | .2 | Certificate of Amendment to Certificate of Formation of MagnaChip Semiconductor LLC(1) | ||
3 | .3 | Fifth Amended and Restated Limited Liability Company Operating Agreement of MagnaChip Semiconductor LLC(1) | ||
3 | .4 | Articles of Incorporation of MagnaChip Semiconductor S.A. | ||
3 | .5 | Certificate of Incorporation of MagnaChip Semiconductor Finance Company | ||
3 | .6 | Bylaws of MagnaChip Semiconductor Finance Company | ||
3 | .7 | Certificate of Formation for MagnaChip Semiconductor SA Holdings LLC | ||
3 | .8 | Amended and Restated Limited Liability Company Agreement of MagnaChip Semiconductor SA Holdings LLC (USA) | ||
3 | .9 | Deed of Amendment to the Articles of Association of MagnaChip Semiconductor B.V. (English translation) | ||
3 | .10 | Articles of Incorporation of MagnaChip Semiconductor, Inc. (USA) contained in the Agreement and Plan of Merger by and between IC Media Corporation and MagnaChip Semiconductor, Inc. (USA) | ||
3 | .11 | Bylaws of MagnaChip Semiconductor, Inc. (USA), as amended (formerly IC Media Corporation) | ||
3 | .12 | Articles of Incorporation of MagnaChip Semiconductor Inc. (Japan) (English translation) | ||
3 | .13 | Memorandum of Association of MagnaChip Semiconductor Limited (Hong Kong) | ||
3 | .14 | Articles of Association of MagnaChip Semiconductor Limited (Hong Kong) | ||
3 | .15 | Memorandum of Association of MagnaChip Semiconductor Limited (United Kingdom) | ||
3 | .16 | Articles of Association of MagnaChip Semiconductor Limited (United Kingdom) | ||
3 | .17 | Articles of Incorporation of MagnaChip Semiconductor Limited (Taiwan) (English translation) | ||
3 | .18 | Memorandum of Association of MagnaChip Semiconductor Holding Company Limited, as amended (British Virgin Islands) (formerly IC Media Holding Company Limited) | ||
3 | .19 | Articles of Association of MagnaChip Semiconductor Holding Company Limited, as amended (British Virgin Islands) (formerly IC Media Holding Company Limited) | ||
4 | .1 | Registration Rights Agreement, dated as of November 9, 2009, by and among MagnaChip Semiconductor LLC and each of the securityholders named therein(1) | ||
4 | .2 | [reserved] | ||
4 | .3 | [reserved] | ||
4 | .4 | Indenture, dated as of April 9, 2010, by and among MagnaChip Semiconductor S.A., MagnaChip Semiconductor Finance Company, the guarantors as named therein and Wilmington Trust FSB, as trustee(1) | ||
4 | .5 | Form of 10.500% Senior Notes due 2018 and notation of guarantee (included in Exhibit 4.4) | ||
4 | .6 | Exchange and Registration Rights Agreement, dated as of April 9, 2010, by and among MagnaChip Semiconductor S.A., MagnaChip Semiconductor Finance Company, the guarantors named therein, and Goldman, Sachs & Co., Barclays Capital Inc., Deutsche Bank Securities Inc. and Morgan Stanley & Co. Incorporated, as representatives of the several purchasers named therein(1) |
Table of Contents
5 | .1 | Opinion of Jones Day* | ||
5 | .2 | Opinion of Dechert Luxembourg* | ||
5 | .3 | Opinion of NautaDutilh N.V.* | ||
5 | .4 | Opinion of DLA Piper Tokyo Partnership* | ||
5 | .5 | Opinion of DLA Piper Hong Kong* | ||
5 | .6 | Opinion of Lee, Tsai & Partners* | ||
5 | .7 | Opinion of DLA Piper UK LLP* | ||
5 | .8 | Opinion of Harney Westwood & Riegels* | ||
10 | .1 | Amended and Restated Credit Agreement, dated as of November 6, 2009, among MagnaChip Semiconductor S.A., MagnaChip Semiconductor Finance Company, the guarantors named therein, the lenders named therein, and Wilmington Trust FSB, as Administrative Agent(1) | ||
10 | .2 | Intellectual Property License Agreement, dated as of October 6, 2004, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1) | ||
10 | .3 | Land Lease and Easement Agreement, dated as of October 6, 2004, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1)(2) | ||
10 | .4 | First Amendment to Land Lease and Easement Agreement, dated as of December 30, 2005, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1) | ||
10 | .5 | General Service Supply Agreement, dated as of October 6, 2004, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1)(3) | ||
10 | .6 | First Amendment to the General Service Supply Agreement, dated as of December 30, 2005, by and between Hynix Semiconductor Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1) | ||
10 | .7 | License Agreement (ModularBCD), dated as of March 18, 2005, by and between Advanced Analogic Technologies, Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1)(2) | ||
10 | .8 | Amended & Restated License Agreement (TrenchDMOS), dated as of September 19, 2007, by and between Advanced Analogic Technologies, Inc. and MagnaChip Semiconductor, Ltd. (Korea)(1)(3) | ||
10 | .9 | Technology License Agreement, dated as of December 16, 1996, by and between Advanced RISC Machines Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to LG Semicon Company Limited)(1)(2) | ||
10 | .10 | Amendment to the Technology License Agreement, dated as of October 16, 2006, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea)(1)(3) | ||
10 | .11 | ARM7201TDSP Device License Agreement, dated as of August 26, 1997, by and between Advanced RISC Machines Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to LG Semicon Company Limited)(1)(2) | ||
10 | .12 | Technology License Agreement, dated as of October 5, 1995, by and between Advanced RISC Machines Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to LG Semicon Company Limited)(1)(3) | ||
10 | .13 | Technology License Agreement, dated as of July 2001, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to Hynix Semiconductor Inc.)(1)(2) | ||
10 | .14 | Technology License Agreement, dated as of August 22, 2001, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to Hynix Semiconductor Inc.)(1)(2) | ||
10 | .15 | Technology License Agreement, dated as of May 20, 2004, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to Hynix Semiconductor Inc.)(1) |
Table of Contents
10 | .16 | Design Migration Agreement, dated as of May 1, 2007, by and between ARM Limited and MagnaChip Semiconductor, Ltd. (Korea)(1)(3) | ||
10 | .17 | Basic Agreement on Joint Development and Grant of License, dated as of November 10, 2006, by and between MagnaChip Semiconductor, Ltd. and Silicon Works (English translation)(1) | ||
10 | .18 | Master Service Agreement, dated as of December 27, 2000, by and between Sharp Corporation and MagnaChip Semiconductor, Ltd. (Korea) (successor in interest to Hyundai Electronics Japan Co., Ltd) (English translation)(1) | ||
10 | .19 | Warrant Agreement, dated as of November 9, 2009, between MagnaChip Semiconductor LLC and American Stock Transfer & Trust Company, LLC(1) | ||
10 | .20 | MagnaChip Semiconductor LLC 2009 Common Unit Plan(1) | ||
10 | .21 | MagnaChip Semiconductor LLC 2009 Common Unit Plan form of Option Agreement (Non-U.S. Participants)(1) | ||
10 | .22 | MagnaChip Semiconductor LLC 2009 Common Unit Plan form of Option Agreement (U.S. Participants)(1) | ||
10 | .23 | MagnaChip Semiconductor LLC 2009 Common Unit Plan form of Restricted Unit Agreement (Non-U.S. Participants)(1) | ||
10 | .24 | MagnaChip Semiconductor LLC 2009 Common Unit Plan form of Restricted Unit Agreement (U.S. Participants)(1) | ||
10 | .25 | MagnaChip Semiconductor Corporation 2010 Equity Incentive Plan(1) | ||
10 | .26 | MagnaChip Semiconductor Corporation 2010 Employee Stock Purchase Plan(1) | ||
10 | .27 | Amended and Restated Service Agreement, dated as of May 8, 2008, by and between MagnaChip Semiconductor, Ltd. (Korea) and Sang Park(1) | ||
10 | .28 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Sang Park(1) | ||
10 | .29 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Sang Park(1) | ||
10 | .30 | Entrustment Agreement, dated as of October 6, 2004, by and between MagnaChip Semiconductor, Ltd. (Korea) and Tae Young Hwang(1) | ||
10 | .31 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Tae Young Hwang(1) | ||
10 | .32 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Tae Young Hwang(1) | ||
10 | .33 | Offer Letter dated March 7, 2006, from MagnaChip Semiconductor LLC and MagnaChip Semiconductor, Inc. to Brent Rowe, as supplemented on December 20, 2006(1) | ||
10 | .34 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Brent Rowe(1) | ||
10 | .35 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Brent Rowe(1) | ||
10 | .36 | Offer Letter dated September 5, 2006, from MagnaChip Semiconductor LLC and MagnaChip Semiconductor, Ltd. to Margaret Sakai(1) | ||
10 | .37 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Margaret Sakai(1) | ||
10 | .38 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Margaret Sakai(1) | ||
10 | .39 | Offer Letter, dated as of July 1, 2007, by and between MagnaChip Semiconductor, Ltd. (Korea) and Heung Kyu Kim(1) |
Table of Contents
10 | .40 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Heung Kyu Kim(1) | ||
10 | .41 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Heung Kyu Kim(1) | ||
10 | .42 | Offer Letter, dated as of June 20, 2007, by and between MagnaChip Semiconductor, Ltd. (Korea) and Tae Jong Lee(1) | ||
10 | .43 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Tae Jong Lee(1) | ||
10 | .44 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and Tae Jong Lee(1) | ||
10 | .45 | Service Agreement, dated as of April 1, 2006, by and between MagnaChip Semiconductor, Ltd. (Korea) and John McFarland(1) | ||
10 | .46 | Notice of Grant of Unit Option, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and John McFarland(1) | ||
10 | .47 | Notice of Grant of Restricted Units, dated as of December 8, 2009, by and between MagnaChip Semiconductor LLC and John McFarland(1) | ||
10 | .48 | Senior Advisor Agreement, dated as of April 10, 2009, by and between MagnaChip Semiconductor, Ltd.(Korea) and Robert J. Krakauer(1) | ||
10 | .49 | MagnaChip Semiconductor LLC Form of Indemnification Agreement with Directors | ||
10 | .50 | Form of Accredited Investor Certification delivered to the Official Committee of Unsecured Creditors of MagnaChip Semiconductor Finance Company, et al.(1) | ||
10 | .51 | Form of Subscription Agreement for common units of MagnaChip Semiconductor LLC (in connection with the Committee’s Plan of Reorganization under Chapter 11 of the Bankruptcy Code)(1) | ||
10 | .52 | Subscription Form for Rights Offering in connection with the Committee’s Plan of Reorganization under Chapter 11 of the Bankruptcy Code(1) | ||
10 | .53 | $35,000,000 Common Unit Backstop Commitment letter, dated as of September 23, 2009, from Avenue Capital Management II, L.P., solely in its capacity as investment advisor to Avenue Investments, L.P., Avenue International Master, L.P., Avenue Special Situations Fund IV, L.P., Avenue Special Situations Fund V, L.P. and Avenue CDP-Global Opportunities Fund, L.P. (included in Exhibit 2.1) | ||
10 | .54 | MagnaChip Semiconductor LLC Profit Sharing Plan as adopted on December 31, 2009 and as amended on February 15, 2010(1)(3) | ||
12 | .1 | Statement Regarding Computation of Ratio of Earnings to Fixed Charges | ||
21 | .1 | Subsidiaries of MagnaChip Semiconductor LLC(1) | ||
23 | .1 | Consent of Samil PricewaterhouseCoopers | ||
23 | .2 | Consent of Jones Day (contained in Exhibit 5.1)* | ||
23 | .3 | Consent of Dechert Luxembourg (contained in Exhibit 5.2)* | ||
23 | .4 | Consent of NautaDutilh N.V. (contained in Exhibit 5.3)* | ||
23 | .5 | Consent of DLA Piper Tokyo Partnership (contained in Exhibit 5.4)* | ||
23 | .6 | Consent of DLA Piper Hong Kong (contained in Exhibit 5.5)* | ||
23 | .7 | Consent of Lee, Tsai & Partners (contained in Exhibit 5.6)* | ||
23 | .8 | Consent of DLA Piper UK LLP (contained in Exhibit 5.7)* | ||
23 | .9 | Consent of Harney Westwood & Riegels (contained in Exhibit 5.8)* | ||
24 | .1 | Powers of Attorney (included on signature pages hereof) |
Table of Contents
25 | .1 | Statement of Eligibility of the Trustee on Form T-1 under the Trust Indenture Act | ||
99 | .1 | Form of Letter of Transmittal | ||
99 | .2 | Form of Notice of Guaranteed Delivery | ||
99 | .3 | Form of Letter to Brokers, Dealers and Other Nominees | ||
99 | .4 | Form of Letter to Beneficial Owners Regarding Offer to Exchange |
* | To be filed by amendment. |
(1) | Incorporated by reference to the respective exhibits to MagnaChip Semiconductor LLC’s Registration Statement onForm S-1 (RegistrationNo. 333-165467) initially filed on March 15, 2010, as amended. | |
(2) | Certain portions of this document have been omitted pursuant to a grant of confidential treatment by the SEC. | |
(3) | Certain portions of this document have been omitted pursuant to a request for confidential treatment by the SEC. |