Delaware (State of incorporation) | 23-1722724 (I.R.S. Employer Identification Number) |
Title of Each Class | Name of Each Exchange on Which Registered | |||
Common Stock, $0.001 par value | The NASDAQ Global Select Market |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
(Do not check if a smaller reporting company) |
Page | ||
Item 1. | Business |
• | Designing and developing innovative packaging and test technologies; |
• | Offering a broad portfolio of cost-effective solutions and services; |
• | Successfully penetrating strategic end markets which offer solid growth prospects; |
• | Cultivating long-standing relationships with our customers, which include many of the world’s leading semiconductor companies; |
• | Collaborating with customers, original equipment manufacturers (“OEMs”) and equipment and material suppliers; |
• | Developing a competitive cost structure with disciplined capital investment; |
• | Building expertise in high-volume manufacturing processes and developing a reputation for high quality and solid execution and |
• | Providing a geographically diverse operating base, with research and development, engineering support and production capabilities at various facilities in China, Japan, Korea, Malaysia, the Philippines and Taiwan. |
• | An increasing demand for mobile and home internet-connected devices, including the world-wide adoption of mobile “smart” phones and tablets that can access the internet and provide multimedia capabilities. |
• | An increase in mobility and connectivity capabilities and growing digital content driving demand for new broadband wired and wireless networking equipment. |
• | The proliferation of semiconductor devices into well-established end products such as automotive systems due to increased use of electronics for safety, navigation, fuel efficiency, emission reduction and entertainment systems. |
• | An overall increase in the semiconductor content within electronic products to provide greater functionality and higher levels of performance. |
• | The growth of advanced System-in-Package ("SiP") modules where multiple semiconductor components with different functionalities are combined into a single integrated circuit ("IC") package. The increasing demand for miniaturization and higher functionality at competitive cost is driving the adoption of advanced SiP in new products. |
• | Offering capacity to absorb large orders and accommodate quick turn-around times; |
• | Obtaining favorable pricing on materials and equipment, where possible, by using our purchasing power and leading industry position; |
• | Qualifying production of customer devices at multiple manufacturing sites to mitigate the risks of supply disruptions and |
• | Providing capabilities and solutions for customer-specific requirements. |
Year Ended December 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||
(In millions, except percentage of net sales) | ||||||||||||||||||||
Advanced products | $ | 1,433 | 49.7 | % | $ | 1,553 | 49.6 | % | $ | 1,451 | 49.1 | % | ||||||||
Mainstream products | 1,452 | 50.3 | % | 1,576 | 50.4 | % | 1,505 | 50.9 | % | |||||||||||
Total net sales | $ | 2,885 | 100.0 | % | $ | 3,129 | 100.0 | % | $ | 2,956 | 100.0 | % |
End Market | Applications | Package Type | ||||
Communications | Handsets (Cell Phones, Feature Phones, Smart Phones) Handheld Devices Tablets Wireless LAN | Stacked Chip Scale Package Flip Chip Chip Scale Package Wafer Level Chip Scale Package ChipArray Ball Grid Array Fine Pitch Flip Chip Chip Scale Package Flip Chip Stacked Chip Scale Package | ||||
Automotive and Industrial | Infotainment Safety Performance, Fuel Efficiency and Environmental Sustainability Comfort, Aesthetics and Security | MicroLeadFrame Small Outline Integrated Circuit Thin Shrink Small Outline Package Plastic Ball Grid Array Thin Quad Flat Pack Flip Chip Ball Grid Array ChipArray Ball Grid Array | ||||
Consumer | Television Set Top Boxes Portable Media/Personal Visual/Imaging Products Gaming | Flip Chip Ball Grid Array Thin Quad Flat Pack ChipArray Ball Grid Array MicroLeadFrame Digital Micromirror Device Plastic Ball Grid Array | ||||
Networking | Servers Routers Switches | Flip Chip Ball Grid Array Plastic Ball Grid Array MicroLeadFrame ChipArray Ball Grid Array Thin Quad Flat Pack | ||||
Computing | Desk Top Computer Laptop Computer Notebook Computer Hard Disk Drive Printers and Other Peripherals Computer Server | MicroLeadFrame Flip Chip Ball Grid Array ChipArray Ball Grid Array Flip Chip Chip Scale Package Stacked Chip Scale Package Small Outline Integrated Circuit |
• | Managing and coordinating ongoing manufacturing activity; |
• | Providing information and expert advice on our portfolio of packaging and test services and related trends; |
• | Managing the start-up of specific packaging and test programs; |
• | Working to improve our customers’ time-to-market; |
• | Providing a continuous flow of information to our customers regarding products and programs in process; |
• | Partnering with customers on design solutions; |
• | Researching and assisting in the resolution of technical and logistical issues; |
• | Aligning our technologies and research and development activities with the needs of our customers and OEMs; |
• | Providing guidance and solutions to customers in managing their supply chains; |
• | Driving industry standards; |
• | Providing design and simulation services to ensure package reliability and |
• | Collaborating with our customers on continuous quality improvement initiatives. |
• | Achieve near real time and automated communications of order fulfillment information, such as inventory control, production schedules and engineering data, including production yields, device specifications and quality indices and |
• | Connect our customers to our sales and marketing personnel world-wide and to our factories. |
• | technical competence; |
• | quality; |
• | price; |
• | breadth of packaging and test services offered, including turnkey services; |
• | new package and test design, technology innovation and implementation; |
• | cycle times; |
• | customer service and |
• | available capacity and ability to invest in capacity, geographic location and scale of manufacturing. |
Item 1A. | Risk Factors |
• | fluctuation in demand for semiconductors and conditions in the semiconductor industry generally, as well as by specific customers, such as inventory reductions by our customers impacting demand in key markets; |
• | changes in our capacity and capacity utilization rates; |
• | changes in average selling prices which can occur quickly due to the absence of long term agreements on price; |
• | changes in the mix of the semiconductor packaging and test services that we sell; |
• | the development, transition and ramp to high volume manufacture of more advanced silicon nodes and evolving wafer, packaging and test technologies, may cause production delays, lower manufacturing yields and supply constraints for new wafers and other materials; |
• | absence of backlog, the short-term nature of our customers’ commitments, double bookings by customers and deterioration in customer forecasts and the impact of these factors, including the possible delay, rescheduling and cancellation of large orders, or the timing and volume of orders relative to our production capacity; |
• | changes in costs, quality, availability and delivery times of raw materials, components and equipment; |
• | changes in labor costs to perform our services; |
• | wage inflation and fluctuations in commodity prices, including gold, copper and other precious metals; |
• | the timing of expenditures in anticipation of future orders; |
• | changes in effective tax rates; |
• | the availability and cost of financing; |
• | intellectual property transactions and disputes; |
• | high leverage and restrictive covenants; |
• | warranty and product liability claims and the impact of quality excursions and customer disputes and returns; |
• | costs associated with legal claims, indemnification obligations, judgments and settlements; |
• | international events, political instability, civil disturbances or environmental or natural events, such as earthquakes, that impact our operations; |
• | pandemic illnesses that may impact our labor force and our ability to travel; |
• | costs of acquisitions and divestitures and difficulties integrating acquisitions; |
• | our ability to attract and retain qualified personnel to support our global operations; |
• | fluctuations in foreign exchange rates; |
• | fluctuations in our manufacturing yields; |
• | our ability to penetrate various market segments, such as power discrete and the mid-tier and entry-level segments of the mobile device market; |
• | dependence on key customers or concentration of customers in certain end markets, such as mobile communications and automotive and |
• | restructuring charges, asset write-offs and impairments. |
• | their desire to realize higher utilization of their existing packaging and test capacity, especially during downturns in the semiconductor industry; |
• | their unwillingness to disclose proprietary technology; |
• | their possession of more advanced packaging and test technologies and |
• | the guaranteed availability of their own packaging and test capacity. |
• | make it more difficult for us to satisfy our obligations with respect to our indebtedness, including our obligations under our indentures to purchase notes tendered as a result of a change in control of Amkor; |
• | increase our vulnerability to general adverse economic and industry conditions; |
• | limit our ability to fund future working capital, capital expenditures, research and development and other business opportunities, including joint ventures and acquisitions; |
• | require us to dedicate a substantial portion of our cash flow from operations to service payments of interest and principal on our debt, thereby reducing the availability of our cash flow to fund future working capital, capital expenditures, research and development expenditures and other general corporate requirements; |
• | increase the volatility of the price of our common stock; |
• | limit our flexibility to react to changes in our business and the industry in which we operate; |
• | place us at a competitive disadvantage to any of our competitors that have less debt; |
• | limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds; |
• | limit our ability to refinance our existing indebtedness, particularly during periods of adverse credit market conditions when refinancing indebtedness may not be available under interest rates and other terms acceptable to us or at all and |
• | increase our cost of borrowing. |
• | changes in consumer demand resulting from deteriorating conditions in local economies; |
• | regulations and policies imposed by U.S. or foreign governments, such as tariffs, customs, duties and other restrictive trade barriers, antitrust and competition, tax, currency and banking, privacy, labor, environmental, health and safety; |
• | laws, rules, regulations and policies within China and other countries that may favor domestic companies over non-domestic companies, including customer- or government-supported efforts to promote the development and growth of local competitors; |
• | the payment of dividends and other payments by non-U.S. subsidiaries may be subject to prohibitions, limitations or taxes in local jurisdictions; |
• | fluctuations in currency exchange rates, particularly with the recent acquisition of J-Devices; |
• | political and social conditions, such as civil unrest and terrorism; |
• | disruptions or delays in shipments caused by customs brokers or government agencies; |
• | difficulties in attracting and retaining qualified personnel and managing foreign operations, including foreign labor disruptions; |
• | difficulty in enforcing contractual rights and protecting our intellectual property rights; |
• | potentially adverse tax consequences resulting from tax laws in the U.S. and in foreign jurisdictions in which we operate and |
• | local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act (FCPA) and other anti-corruption laws and regulations. |
• | we may face delays in the design and implementation of the system; |
• | the cost of the systems may exceed our plans and expectations and |
• | disruptions resulting from the implementation or integration of the systems may impact our ability to process transactions and delay shipments to customers, impact our results of operations or financial condition or harm our control environment. |
• | increasing the scope, geographic diversity and complexity of our operations; |
• | conforming an acquired company's standards, practices, systems and controls with our operations; |
• | increasing complexity from combining recent acquisitions of an acquired business; |
• | unexpected losses of key employees or customers of an acquired business; other difficulties in the assimilation of acquired operations, technologies or products and |
• | diversion of management and other resources from other parts of our operations and adverse effects on existing business relationships with customers. |
• | use a significant portion of our available cash; |
• | issue equity securities, which may dilute the ownership of current stockholders; |
• | incur substantial debt; |
• | incur or assume known or unknown contingent liabilities and |
• | incur large, immediate accounting write offs and face antitrust or other regulatory inquiries or actions. |
• | our future financial condition, results of operations and cash flows; |
• | general market conditions for financing; |
• | volatility in fixed income, credit and equity markets and |
• | economic, political and other global conditions. |
• | discontinue the use of certain processes or cease to provide the services at issue, which could curtail our business; |
• | pay substantial damages; |
• | develop non-infringing technologies, which may not be feasible or |
• | acquire licenses to such technology, which may not be available on commercially reasonable terms or at all. |
• | contaminants in the manufacturing environment; |
• | human error; |
• | equipment malfunction; |
• | changing processes to address environmental requirements; |
• | defective raw materials or |
• | defective plating services. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Approximate Facility Size (Square Feet) | |||
China | |||
Shanghai, China (1) | 915,000 | ||
Japan | |||
Usuki, Japan | 460,000 | ||
Hakodate, Japan (2) | 438,000 | ||
Kumamoto, Japan (2) | 370,000 | ||
Fukui, Japan | 267,000 | ||
Kitsuki, Japan | 183,000 | ||
Aizu, Japan (3) | 170,000 | ||
Miyagi, Japan | 169,000 | ||
Kitakami, Japan (3) | 127,000 | ||
Oita, Japan (3) | 117,000 | ||
Fukuoka, Japan (3) | 104,000 | ||
Neagari, Japan (3) | 89,000 | ||
Korea | |||
Gwangju, Korea | 1,154,000 | ||
Seoul, Korea | 666,000 | ||
Pupyong, Korea (4) | 448,000 | ||
Malaysia | |||
Telok Panglima Garang, Malaysia (1) | 379,000 | ||
Philippines | |||
Muntinlupa, Philippines (5) | 648,000 | ||
Province of Laguna, Philippines (5) | 633,000 | ||
Taiwan | |||
Hsinchu, Taiwan | 490,000 | ||
Lung Tan, Taiwan | 353,000 | ||
Total all facilities | 8,180,000 |
(1) | Land is leased. |
(2) | Includes leased support facilities at a nearby location. |
(3) | Leased facility. |
(4) | Includes a lease for 44,000 square feet of building space. |
(5) | As a result of foreign ownership restrictions in the Philippines, the land is leased. A portion of the land we lease is owned by realty companies in which we own a 40% interest. We also lease 648,000 square feet of building space. |
Item 3. | Legal Proceedings |
Item 4. | Mine Safety Disclosures |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
High | Low | ||||||||||
2015 | |||||||||||
First Quarter | $ | 9.91 | $ | 6.35 | |||||||
Second Quarter | 8.79 | 5.90 | |||||||||
Third Quarter | 5.93 | 4.14 | |||||||||
Fourth Quarter | 6.93 | 4.44 | |||||||||
2014 | |||||||||||
First Quarter | $ | 6.86 | $ | 5.12 | |||||||
Second Quarter | 12.21 | 6.88 | |||||||||
Third Quarter | 11.44 | 8.41 | |||||||||
Fourth Quarter | 8.61 | 5.97 |
Period | Total Number of Shares Purchased (a) | Average Price Paid Per Share ($) | Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (b) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ($) (b) | ||||||
October 1-October 31 | — | $ | — | — | $ | 91,586,032 | ||||
November 1-November 30 | 27,707 | 6.59 | — | 91,586,032 | ||||||
December 1-December 31 | — | — | — | 91,586,032 | ||||||
Total | 27,707 | $ | 6.59 | — |
(a) | Represents shares of common stock surrendered to us to satisfy tax withholding obligations associated with the vesting of restricted shares issued to employees. |
(b) | Our Board of Directors previously authorized the repurchase of up to $300.0 million of our common stock, $150.0 million in August 2011 and $150.0 million in February 2012, exclusive of any fees, commissions or other expenses. During 2014 and 2015, we made no common stock purchases, and at December 31, 2015, approximately $91.6 million was available pursuant to the stock repurchase program. |
(1) | The preceding Stock Performance Graph is not deemed filed with the Securities and Exchange Commission and shall not be incorporated by reference in any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
Year Ended December 31, | |||||||||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | ||||||||||||||||||
Amkor Technology, Inc. | $ | 100.00 | $ | 58.84 | $ | 57.23 | $ | 82.73 | $ | 95.82 | $ | 82.05 | |||||||||||
S&P 500 | 100.00 | 102.11 | 118.45 | 156.82 | 178.29 | 180.75 | |||||||||||||||||
PHLX Semiconductor | 100.00 | 103.93 | 114.9 | 152.42 | 194.3 | 180.02 |
Item 6. | Selected Consolidated Financial Data |
For the Year Ended December 31, | |||||||||||||||||||
2015 (d) | 2014 (c) | 2013 (e) | 2012 | 2011 | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
Income Statement Data: | |||||||||||||||||||
Net sales | $ | 2,884,603 | $ | 3,129,440 | $ | 2,956,450 | $ | 2,759,546 | $ | 2,776,359 | |||||||||
Gross profit (a) | 479,265 | 552,822 | 544,513 | 423,810 | 490,569 | ||||||||||||||
Operating income | 164,839 | 221,460 | 232,109 | 152,692 | 193,670 | ||||||||||||||
Loss on debt retirement (b) | 9,560 | 757 | 12,330 | 1,199 | 15,531 | ||||||||||||||
Income tax expense | 28,035 | 33,845 | 22,646 | 17,001 | 7,124 | ||||||||||||||
Equity in earnings of J-Devices (c) | 20,107 | 31,654 | 10,316 | 5,592 | 7,085 | ||||||||||||||
Net income (a) (c) (d) | 59,607 | 133,887 | 111,657 | 42,702 | 93,095 | ||||||||||||||
Net income attributable to Amkor | 56,812 | 130,386 | 109,296 | 41,818 | 91,808 | ||||||||||||||
Net income attributable to Amkor per common share: | |||||||||||||||||||
Basic | $ | 0.24 | $ | 0.56 | $ | 0.58 | $ | 0.26 | $ | 0.48 | |||||||||
Diluted | $ | 0.24 | $ | 0.55 | $ | 0.50 | $ | 0.24 | $ | 0.39 | |||||||||
Other Financial Data: | |||||||||||||||||||
Depreciation and amortization | $ | 494,200 | $ | 464,706 | $ | 410,346 | $ | 370,479 | $ | 335,644 | |||||||||
Payments for property, plant and equipment | 537,975 | 681,120 | 566,256 | 533,512 | 466,694 | ||||||||||||||
Balance Sheet Data: | |||||||||||||||||||
Cash and cash equivalents | $ | 523,172 | $ | 449,946 | $ | 610,442 | $ | 413,048 | $ | 434,631 | |||||||||
Working capital | 299,296 | 497,358 | 541,480 | 438,781 | 354,644 | ||||||||||||||
Total assets | 4,031,300 | 3,635,405 | 3,427,298 | 3,025,215 | 2,773,047 | ||||||||||||||
Non-current liabilities, including debt | 1,787,983 | 1,803,879 | 1,771,422 | 1,705,794 | 1,429,640 | ||||||||||||||
Total Amkor stockholders’ equity | 1,207,883 | 1,116,235 | 953,740 | 657,955 | 693,266 |
(a) | In January 2015, we reached a resolution to a patent license dispute and entered into a settlement agreement. During 2014, 2013 and 2012 we recorded charges of $75.3 million, $10.0 million and $50.0 million, respectively, to cost of sales and $13.7 million, $1.8 million, and $6.0 million, respectively, to interest expense relating to this patent license dispute. |
(b) | During 2015, we recorded a loss on debt retirement of $8.9 million relating to the early repayment of our 7.375% Senior Notes due May 2018. During 2013, we exchanged debt for shares of our common stock and a cash payment and recorded a charge of $11.6 million. During 2011, we recorded a net loss of $15.5 million related to the tender and call of debt and the write-off of associated unamortized deferred debt issuance costs. |
(c) | On June 30, 2014, we sold 100% of the shares of our previously wholly-owned subsidiary in Japan to J-Devices, our previously unconsolidated equity-method joint venture in Japan. Subsequent to June 30, 2014, the results of the divested entity are included in J-Devices' financial results and in our corresponding equity in earnings of J-Devices. We recognized a net gain on the sale of $9.2 million in other (income) expense, net. In addition, J-Devices recognized a |
(d) | We increased our investment in J-Devices to 60% in 2013 and to 100% in 2015 through the exercise of additional options. As a result, our accounting for J-Devices changed from the equity method to the consolidation method effective at the time of acquisition, December 30, 2015. We recognized a net loss of $13.9 million in other (income) expense, net resulting from a loss of $30.0 million related to the release of our interest in J-Devices' accumulated foreign currency translation adjustments offset by a gain of $16.1 million related to the step-up to fair value of our previous investments in J-Devices. Our balance sheet data as of December 31 2015 reflects the consolidation of J-Devices. The operating results of J-Devices will be consolidated beginning in 2016. |
(e) | On July 31, 2013, we completed the purchase of Amkor Technology Malaysia Sdn. Bhd. The financial results of the entity have been included in our Consolidated Financial Statements from the date of acquisition. |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Year Ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | ||
Materials | 36.6 | % | 36.8 | % | 40.0 | % | ||
Labor | 15.1 | % | 14.0 | % | 14.4 | % | ||
Other manufacturing costs | 31.7 | % | 29.1 | % | 26.8 | % | ||
Patent license litigation | — | % | 2.4 | % | 0.4 | % | ||
Gross margin | 16.6 | % | 17.7 | % | 18.4 | % | ||
Operating income | 5.7 | % | 7.1 | % | 7.9 | % | ||
Income before income taxes and equity in earnings of unconsolidated affiliate | 2.3 | % | 4.3 | % | 4.2 | % | ||
Net income attributable to Amkor | 2.0 | % | 4.2 | % | 3.7 | % |
Change | |||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 over 2014 | 2014 over 2013 | |||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Net sales | $ | 2,884,603 | $ | 3,129,440 | $ | 2,956,450 | $ | (244,837 | ) | (7.8 | )% | $ | 172,990 | 5.9 | % |
Change | |||||||||||||||||||
2015 | 2014 | 2013 | 2015 over 2014 | 2014 over 2013 | |||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||
Gross profit | $ | 479,265 | $ | 552,822 | $ | 544,513 | $ | (73,557 | ) | $ | 8,309 | ||||||||
Gross margin | 16.6 | % | 17.7 | % | 18.4 | % | (1.1 | )% | (0.7 | )% |
Change | |||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 over 2014 | 2014 over 2013 | |||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Selling, general and administrative | $ | 232,409 | $ | 254,498 | $ | 247,779 | $ | (22,089 | ) | (8.7 | )% | $ | 6,719 | 2.7 | % |
Change | |||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 over 2014 | 2014 over 2013 | |||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Research and development | $ | 82,017 | $ | 76,864 | $ | 64,625 | $ | 5,153 | 6.7 | % | $ | 12,239 | 18.9 | % |
Change | |||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 over 2014 | 2014 over 2013 | |||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||
Interest expense, including related party | $ | 86,376 | $ | 109,925 | $ | 105,908 | $ | (23,549 | ) | (21.4 | )% | $ | 4,017 | 3.8 | % | ||||||||||
Other (income) expense, net | 10,928 | (24,543 | ) | 2,214 | 35,471 | >100% | (26,757 | ) | >(100)% | ||||||||||||||||
Total other expense, net | $ | 97,304 | $ | 85,382 | $ | 108,122 | $ | 11,922 | 14.0 | % | $ | (22,740 | ) | (21.0 | )% |
Change | |||||||||||||||||||
2015 | 2014 | 2013 | 2015 over 2014 | 2014 over 2013 | |||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||
Income tax expense | $ | 28,035 | $ | 33,845 | $ | 22,646 | $ | (5,810 | ) | $ | 11,199 | ||||||||
Effective tax rate | 41.5 | % | 24.9 | % | 18.3 | % |
Change | ||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 over 2014 | 2014 over 2013 | ||||||||||||||||||||
(In thousands, except percentages) | ||||||||||||||||||||||||
Equity in earnings of J-Devices | $ | 20,107 | $ | 31,654 | $ | 10,316 | $ | (11,547 | ) | (36.5 | )% | $ | 21,338 | >100% |
For the Quarter Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sept. 30, 2014 | June 30, 2014 | Mar. 31, 2014 | ||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||
Net sales | $ | 670,644 | $ | 734,362 | $ | 736,722 | $ | 742,875 | $ | 853,113 | $ | 812,824 | $ | 767,459 | $ | 696,044 | |||||||||||||||
Gross profit | 102,620 | 126,600 | 115,098 | 134,947 | 120,071 | 153,217 | 150,714 | 128,820 | |||||||||||||||||||||||
Operating income | 20,922 | 51,295 | 38,643 | 53,979 | 39,968 | 75,180 | 60,961 | 45,351 | |||||||||||||||||||||||
Loss on debt retirement, net | — | — | 9,349 | 211 | — | — | 622 | 135 | |||||||||||||||||||||||
Income tax expense | 837 | 16,568 | 4,631 | 5,999 | 1,420 | 14,985 | 12,511 | 4,929 | |||||||||||||||||||||||
Equity in earnings of J-Devices | 4,647 | 1,656 | 7,566 | 6,238 | 2,485 | 3,372 | 20,036 | 5,761 | |||||||||||||||||||||||
Net (loss) income | (9,312 | ) | 29,021 | 10,201 | 29,697 | 14,128 | 48,170 | 50,406 | 21,183 | ||||||||||||||||||||||
Net (loss) income attributable to Amkor | (9,721 | ) | 28,174 | 9,578 | 28,781 | 13,135 | 47,097 | 49,521 | 20,633 | ||||||||||||||||||||||
Net (loss) income attributable to Amkor per common share: | |||||||||||||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | 0.12 | $ | 0.04 | $ | 0.12 | $ | 0.06 | $ | 0.20 | $ | 0.21 | $ | 0.09 | ||||||||||||||
Diluted | $ | (0.04 | ) | $ | 0.12 | $ | 0.04 | $ | 0.12 | $ | 0.06 | $ | 0.20 | $ | 0.21 | $ | 0.09 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Operating activities | $ | 577,945 | $ | 613,909 | $ | 557,536 | |||||
Investing activities | (514,362 | ) | (694,478 | ) | (640,494 | ) | |||||
Financing activities | 9,643 | (79,995 | ) | 280,145 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 577,945 | $ | 613,909 | $ | 557,536 | |||||
Payments for property, plant and equipment | (537,975 | ) | (681,120 | ) | (566,256 | ) | |||||
Free cash flow | $ | 39,970 | $ | (67,211 | ) | $ | (8,720 | ) |
Payments Due for Year Ending December 31, | |||||||||||||||||||||||||||
Total | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Total debt | $ | 1,590,655 | $ | 76,770 | $ | 12,579 | $ | 126,306 | $ | 250,000 | $ | 200,000 | $ | 925,000 | |||||||||||||
Scheduled interest payment obligations (1) | 443,220 | 77,087 | 76,403 | 74,046 | 72,543 | 62,954 | 80,187 | ||||||||||||||||||||
Purchase obligations (2) | 144,929 | 132,981 | 2,258 | 4,590 | 905 | 905 | 3,290 | ||||||||||||||||||||
Operating lease obligations | 72,143 | 21,870 | 15,316 | 9,131 | 8,526 | 5,082 | 12,218 | ||||||||||||||||||||
Severance obligations (3) | 142,959 | 14,306 | 12,887 | 11,586 | 10,428 | 9,387 | 84,365 | ||||||||||||||||||||
Settlement payments (4) | 116,250 | 38,750 | 38,750 | 38,750 | — | — | — | ||||||||||||||||||||
Total contractual obligations | $ | 2,510,156 | $ | 361,764 | $ | 158,193 | $ | 264,409 | $ | 342,402 | $ | 278,328 | $ | 1,105,060 |
(1) | Scheduled interest payment obligations were calculated using stated coupon rates for fixed rate debt and interest rates applicable at December 31, 2015, for variable rate debt. |
(2) | Represents off-balance sheet purchase obligations for capital expenditures and long-term supply contracts outstanding at December 31, 2015, including $32.1 million for construction obligations for K5. |
(3) | Represents estimated benefit payments for our Korean subsidiary severance plan. |
(4) | Represents settlement payments for patent license litigation. At December 31, 2015, the total obligation is $116.3 million of which $33.0 million is a current liability, $73.1 million is a non-current liability and $10.2 million will be imputed into interest over time. |
• | $34.2 million of net foreign pension plan obligations, for which the timing and actual amount of impact on our future cash flow is uncertain. |
• | $7.8 million net liability associated with unrecognized tax benefits. Due to the uncertainty regarding the amount and the timing of any future cash outflows associated with our unrecognized tax benefits, we are unable to reasonably estimate the amount and period of ultimate settlement, if any, with the various taxing authorities. |
• | significant under-performance relative to expected historical or projected future operating results; |
• | significant changes in the manner of our use of the asset; |
• | significant negative industry or economic trends and |
• | our market capitalization relative to net book value. |
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk |
2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | Fair Value | ||||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||||||||
Long term debt: | |||||||||||||||||||||||||||||||
Fixed rate debt | $ | 18,387 | $ | 12,579 | $ | 6,306 | $ | — | $ | — | $ | 925,000 | $ | 962,272 | $ | 939,755 | |||||||||||||||
Average interest rate | 0.5 | % | 0.5 | % | 0.5 | % | — | % | — | % | 6.5 | % | 6.3 | % | |||||||||||||||||
Variable rate debt | $ | 58,383 | $ | — | $ | 120,000 | $ | 250,000 | $ | 200,000 | $ | — | $ | 628,383 | $ | 626,893 | |||||||||||||||
Average interest rate | 2.5 | % | — | % | 3.0 | % | 2.7 | % | 2.9 | % | — | % | 2.8 | % | |||||||||||||||||
Total debt | $ | 76,770 | $ | 12,579 | $ | 126,306 | $ | 250,000 | $ | 200,000 | $ | 925,000 | $ | 1,590,655 | $ | 1,566,648 |
Item 8. | Financial Statements and Supplementary Data |
Page | |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands, except per share data) | |||||||||||
Net sales | $ | 2,884,603 | $ | 3,129,440 | $ | 2,956,450 | |||||
Cost of sales | 2,405,338 | 2,576,618 | 2,411,937 | ||||||||
Gross profit | 479,265 | 552,822 | 544,513 | ||||||||
Selling, general and administrative | 232,409 | 254,498 | 247,779 | ||||||||
Research and development | 82,017 | 76,864 | 64,625 | ||||||||
Total operating expenses | 314,426 | 331,362 | 312,404 | ||||||||
Operating income | 164,839 | 221,460 | 232,109 | ||||||||
Interest expense | 81,407 | 104,956 | 96,739 | ||||||||
Interest expense, related party | 4,969 | 4,969 | 9,169 | ||||||||
Other (income) expense, net | 10,928 | (24,543 | ) | 2,214 | |||||||
Total other expense, net | 97,304 | 85,382 | 108,122 | ||||||||
Income before taxes and equity in earnings of unconsolidated affiliate | 67,535 | 136,078 | 123,987 | ||||||||
Income tax expense | 28,035 | 33,845 | 22,646 | ||||||||
Income before equity in earnings of unconsolidated affiliate | 39,500 | 102,233 | 101,341 | ||||||||
Equity in earnings of J-Devices | 20,107 | 31,654 | 10,316 | ||||||||
Net income | 59,607 | 133,887 | 111,657 | ||||||||
Net income attributable to noncontrolling interests | (2,795 | ) | (3,501 | ) | (2,361 | ) | |||||
Net income attributable to Amkor | $ | 56,812 | $ | 130,386 | $ | 109,296 | |||||
Net income attributable to Amkor per common share: | |||||||||||
Basic | $ | 0.24 | $ | 0.56 | $ | 0.58 | |||||
Diluted | $ | 0.24 | $ | 0.55 | $ | 0.50 | |||||
Shares used in computing per common share amounts: | |||||||||||
Basic | 236,850 | 230,710 | 187,032 | ||||||||
Diluted | 237,170 | 236,731 | 235,330 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Net income | $ | 59,607 | $ | 133,887 | $ | 111,657 | |||||
Other comprehensive income (loss), net of tax: | |||||||||||
Adjustments to unrealized components of defined benefit pension plans, net of tax | 1,100 | (1,512 | ) | 4,360 | |||||||
Foreign currency translation adjustment | (146 | ) | (11,964 | ) | (4,895 | ) | |||||
Equity interest in J-Devices' other comprehensive income (loss), net of tax | 29,829 | (19,136 | ) | (10,961 | ) | ||||||
Total other comprehensive income (loss) | 30,783 | (32,612 | ) | (11,496 | ) | ||||||
Comprehensive income | 90,390 | 101,275 | 100,161 | ||||||||
Comprehensive income attributable to noncontrolling interests | (2,795 | ) | (3,501 | ) | (2,361 | ) | |||||
Comprehensive income attributable to Amkor | $ | 87,595 | $ | 97,774 | $ | 97,800 |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands, except per share data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 523,172 | $ | 449,946 | |||
Restricted cash | 2,000 | 2,681 | |||||
Accounts receivable, net of allowances of $3,158 and $1,377 | 526,143 | 469,683 | |||||
Inventories | 238,205 | 223,379 | |||||
Other current assets | 27,960 | 52,259 | |||||
Total current assets | 1,317,480 | 1,197,948 | |||||
Property, plant and equipment, net | 2,579,017 | 2,206,476 | |||||
Goodwill | 19,443 | — | |||||
Investments | — | 117,733 | |||||
Restricted cash | 2,176 | 2,123 | |||||
Other assets | 113,184 | 111,125 | |||||
Total assets | $ | 4,031,300 | $ | 3,635,405 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Short-term borrowings and current portion of long-term debt | $ | 76,770 | $ | 5,000 | |||
Trade accounts payable | 434,222 | 309,025 | |||||
Capital expenditures payable | 242,980 | 127,568 | |||||
Accrued expenses | 264,212 | 258,997 | |||||
Total current liabilities | 1,018,184 | 700,590 | |||||
Long-term debt | 1,444,107 | 1,450,824 | |||||
Long-term debt, related party | 75,000 | 75,000 | |||||
Pension and severance obligations | 167,197 | 152,673 | |||||
Other non-current liabilities | 101,679 | 125,382 | |||||
Total liabilities | 2,806,167 | 2,504,469 | |||||
Commitments and contingencies (Note 17) | |||||||
Amkor stockholders’ equity: | |||||||
Preferred stock, $0.001 par value, 10,000 shares authorized, designated Series A, none issued | — | — | |||||
Common stock, $0.001 par value, 500,000 shares authorized, 282,724 and 282,231 shares issued, and 237,005 and 236,627 shares outstanding, in 2015 and 2014, respectively | 283 | 282 | |||||
Additional paid-in capital | 1,883,592 | 1,878,810 | |||||
Accumulated deficit | (460,150 | ) | (516,962 | ) | |||
Accumulated other comprehensive loss | (2,084 | ) | (32,867 | ) | |||
Treasury stock, at cost, 45,719 and 45,604 shares in 2015 and 2014, respectively | (213,758 | ) | (213,028 | ) | |||
Total Amkor stockholders’ equity | 1,207,883 | 1,116,235 | |||||
Noncontrolling interests in subsidiaries | 17,250 | 14,701 | |||||
Total equity | 1,225,133 | 1,130,936 | |||||
Total liabilities and equity | $ | 4,031,300 | $ | 3,635,405 |
Additional Paid- In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Amkor Stockholders' Equity | Noncontrolling Interest in Subsidiaries | Total Equity | ||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Cost | ||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2012 | 197,709 | $ | 198 | $ | 1,614,143 | $ | (756,644 | ) | $ | 11,241 | (45,312 | ) | $ | (210,983 | ) | $ | 657,955 | $ | 8,839 | $ | 666,794 | ||||||||||||||||
Net income | — | — | — | 109,296 | — | — | — | 109,296 | 2,361 | 111,657 | |||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (11,496 | ) | — | — | (11,496 | ) | — | (11,496 | ) | ||||||||||||||||||||||||
Conversion of debt to common stock | 64,027 | 64 | 194,970 | — | — | — | — | 195,034 | — | 195,034 | |||||||||||||||||||||||||||
Treasury stock acquired through surrender of shares for tax withholding | — | — | — | — | — | (95 | ) | (466 | ) | (466 | ) | — | (466 | ) | |||||||||||||||||||||||
Issuance of stock through share-based compensation plans | 373 | — | 446 | — | — | — | — | 446 | — | 446 | |||||||||||||||||||||||||||
Share-based compensation | — | — | 2,971 | — | — | — | — | 2,971 | — | 2,971 | |||||||||||||||||||||||||||
Balance at December 31, 2013 | 262,109 | $ | 262 | $ | 1,812,530 | $ | (647,348 | ) | $ | (255 | ) | (45,407 | ) | $ | (211,449 | ) | $ | 953,740 | $ | 11,200 | $ | 964,940 | |||||||||||||||
Net income | — | — | — | 130,386 | — | — | — | 130,386 | 3,501 | 133,887 | |||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (32,612 | ) | — | — | (32,612 | ) | — | (32,612 | ) | ||||||||||||||||||||||||
Conversion of debt to common stock | 18,632 | 19 | 56,331 | — | — | — | — | 56,350 | — | 56,350 | |||||||||||||||||||||||||||
Treasury stock acquired through surrender of shares for tax withholding | — | — | — | — | — | (197 | ) | (1,579 | ) | (1,579 | ) | — | (1,579 | ) | |||||||||||||||||||||||
Issuance of stock through share-based compensation plans | 1,490 | 1 | 6,249 | — | — | — | — | 6,250 | — | 6,250 | |||||||||||||||||||||||||||
Share-based compensation | — | — | 3,700 | — | — | — | — | 3,700 | — | 3,700 | |||||||||||||||||||||||||||
Balance at December 31, 2014 | 282,231 | $ | 282 | $ | 1,878,810 | $ | (516,962 | ) | $ | (32,867 | ) | (45,604 | ) | $ | (213,028 | ) | $ | 1,116,235 | $ | 14,701 | $ | 1,130,936 | |||||||||||||||
Net income | — | — | — | 56,812 | — | — | — | 56,812 | 2,795 | 59,607 | |||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 30,783 | — | — | 30,783 | — | 30,783 | |||||||||||||||||||||||||||
Treasury stock acquired through surrender of shares for tax withholding | — | — | — | — | — | (115 | ) | (730 | ) | (730 | ) | — | (730 | ) | |||||||||||||||||||||||
Issuance of stock through share-based compensation plans | 493 | 1 | 930 | — | — | — | — | 931 | — | 931 | |||||||||||||||||||||||||||
Share-based compensation | — | — | 3,852 | — | — | — | — | 3,852 | — | 3,852 | |||||||||||||||||||||||||||
Subsidiary dividends paid to noncontrolling interest | — | — | — | — | — | — | — | — | (246 | ) | (246 | ) | |||||||||||||||||||||||||
Balance at December 31, 2015 | 282,724 | $ | 283 | $ | 1,883,592 | $ | (460,150 | ) | $ | (2,084 | ) | (45,719 | ) | $ | (213,758 | ) | $ | 1,207,883 | $ | 17,250 | $ | 1,225,133 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 59,607 | $ | 133,887 | $ | 111,657 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 494,200 | 464,706 | 410,346 | ||||||||
Amortization of deferred debt issuance costs and premiums | 1,665 | 2,237 | 2,880 | ||||||||
Deferred income taxes | (697 | ) | (17,190 | ) | (8,256 | ) | |||||
Equity in earnings of unconsolidated affiliate | (20,107 | ) | (31,654 | ) | (10,316 | ) | |||||
Loss on debt retirement | 2,530 | — | 11,619 | ||||||||
Loss (gain) on disposal of fixed assets, net | 1,190 | 1,276 | (2,545 | ) | |||||||
Share-based compensation | 3,852 | 3,700 | 2,971 | ||||||||
Loss from acquisition of J-Devices | 13,878 | — | — | ||||||||
Gain on sale of subsidiary to J-Devices | — | (9,155 | ) | — | |||||||
Other, net | 4,014 | 869 | (712 | ) | |||||||
Changes in assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | 122,840 | (80,775 | ) | (531 | ) | ||||||
Inventories | 27,677 | (27,817 | ) | 38,248 | |||||||
Other current assets | (3,309 | ) | (8,747 | ) | 10,873 | ||||||
Other assets | 333 | 954 | (3,709 | ) | |||||||
Trade accounts payable | (48,368 | ) | 55,693 | (67,198 | ) | ||||||
Accrued expenses | (42,042 | ) | 16,720 | 32,001 | |||||||
Pension and severance obligations | (7,321 | ) | (509 | ) | 20,748 | ||||||
Other non-current liabilities | (31,997 | ) | 109,714 | 9,460 | |||||||
Net cash provided by operating activities | 577,945 | 613,909 | 557,536 | ||||||||
Cash flows from investing activities: | |||||||||||
Payments for property, plant and equipment | (537,975 | ) | (681,120 | ) | (566,256 | ) | |||||
Proceeds from sale of property, plant and equipment | 6,945 | 2,815 | 27,209 | ||||||||
Acquisition of business, net of cash acquired | 22,577 | — | (41,865 | ) | |||||||
Investment in J-Devices | (12,908 | ) | — | (67,372 | ) | ||||||
Disposition of business to J-Devices, net of cash transferred | 8,355 | (15,774 | ) | — | |||||||
Lease payments from J-Devices | — | — | 8,843 | ||||||||
Purchase of short-term investment | — | (20,000 | ) | — | |||||||
Proceeds from short-term investment | — | 20,000 | — | ||||||||
Other investing activities | (1,356 | ) | (399 | ) | (1,053 | ) | |||||
Net cash used in investing activities | (514,362 | ) | (694,478 | ) | (640,494 | ) | |||||
Cash flows from financing activities: | |||||||||||
Borrowings under revolving credit facilities | 290,000 | — | 5,000 | ||||||||
Payments under revolving credit facilities | (150,000 | ) | — | (5,000 | ) | ||||||
Proceeds from issuance of long-term debt | 400,000 | 80,000 | 375,000 | ||||||||
Payments of long-term debt | (530,000 | ) | (145,000 | ) | (80,000 | ) | |||||
Payments for debt issuance costs | (312 | ) | (903 | ) | (3,216 | ) | |||||
Payments for retirement of debt | — | — | (11,619 | ) | |||||||
Payment of deferred consideration for an acquisition | — | (18,763 | ) | — | |||||||
Proceeds from issuance of stock through share-based compensation plans | 931 | 6,250 | 446 | ||||||||
Payments of tax withholding for restricted shares | (730 | ) | (1,579 | ) | (466 | ) | |||||
Payments of subsidiary dividends to noncontrolling interests | (246 | ) | — | — | |||||||
Net cash provided by (used in) financing activities | 9,643 | (79,995 | ) | 280,145 | |||||||
Effect of exchange rate fluctuations on cash and cash equivalents | — | 68 | 207 | ||||||||
Net increase (decrease) in cash and cash equivalents | 73,226 | (160,496 | ) | 197,394 | |||||||
Cash and cash equivalents, beginning of period | 449,946 | 610,442 | 413,048 | ||||||||
Cash and cash equivalents, end of period | $ | 523,172 | $ | 449,946 | $ | 610,442 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 96,227 | $ | 100,650 | $ | 100,577 | |||||
Income taxes | 35,084 | 37,315 | 18,318 | ||||||||
Non-cash investing and financing activities: | |||||||||||
Property, plant and equipment included in capital expenditures payable | 242,980 | 127,568 | 104,800 | ||||||||
Common stock issuance for conversion and exchange in 2014 and 2013, respectively, of 6.0% convertible senior subordinated notes due April 2014, $150 million related party in 2013 | — | 56,350 | 193,650 |
1. | Description of Business and Summary of Significant Accounting Policies |
• | Designing and developing innovative packaging and test technologies; |
• | Offering a broad portfolio of cost-effective solutions and services; |
• | Successfully penetrating strategic end markets which offer solid growth prospects; |
• | Cultivating long-standing relationships with our customers, which include many of the world’s leading semiconductor companies; |
• | Collaborating with customers, original equipment manufacturers ("OEMs") and equipment and material suppliers; |
• | Developing a competitive cost structure with disciplined capital investment; |
• | Building expertise in high-volume manufacturing processes and developing a reputation for high quality and solid execution and |
• | Providing a geographically diverse operating base with research and development, engineering and production capabilities at various facilities throughout China, Japan, Korea, Malaysia, the Philippines and Taiwan. |
Land use rights | 50 to 90 years |
Buildings and improvements | 10 to 40 years |
Machinery and equipment | 2 to 7 years |
Software and computer equipment | 3 to 5 years |
Furniture, fixtures and other equipment | 4 to 10 years |
2. | New Accounting Standards |
3. | Acquisitions and Divestiture |
(In thousands) | |||
Fair value of consideration transferred: | |||
Cash | $ | 105,391 | |
Fair value of our previously held equity interest in J-Devices | 167,684 | ||
Total | $ | 273,075 | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Cash | $ | 127,968 | |
Accounts receivable | 180,177 | ||
Inventory | 42,502 | ||
Other current assets | 2,363 | ||
Property, plant and equipment | 230,319 | ||
Other assets | 9,268 | ||
Short-term borrowings and current portion of long-term debt | (36,770 | ) | |
Other current liabilities | (251,405 | ) | |
Long-term debt | (18,885 | ) | |
Pension obligations | (22,250 | ) | |
Other non-current liabilities | (9,655 | ) | |
Total identifiable net assets | 253,632 | ||
Goodwill | 19,443 | ||
Total | $ | 273,075 |
For the Year Ended December 31, | |||||||
2015 | 2014 | ||||||
(unaudited) | (unaudited) | ||||||
(In thousands, except per share data) | |||||||
Net sales | $ | 3,696,495 | $ | 4,051,076 | |||
Net income | 98,003 | 153,750 | |||||
Net income attributable to Amkor | 95,207 | 150,249 | |||||
Basic earnings per share | 0.40 | 0.65 | |||||
Diluted earnings per share | 0.40 | 0.64 |
4. | Share-Based Compensation Plans |
Number of Shares (In thousands) | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In thousands) | ||||||||
Outstanding at December 31, 2014 | 3,822 | $ | 6.25 | ||||||||
Granted | 390 | 6.99 | |||||||||
Exercised | (205) | 4.57 | |||||||||
Forfeited or expired | (280) | 5.28 | |||||||||
Outstanding at December 31, 2015 | 3,727 | $ | 6.49 | 5.96 | $ | 3,230 | |||||
Fully vested at December 31, 2015 and expected to vest thereafter | 3,709 | $ | 6.50 | 5.95 | $ | 3,213 | |||||
Exercisable at December 31, 2015 | 2,571 | $ | 6.91 | 4.92 | $ | 2,018 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Expected life (in years) | 5.8 | 6.1 | 6.2 | ||||||||
Risk-free interest rate | 1.8 | % | 2.0 | % | 1.7 | % | |||||
Volatility | 45 | % | 57 | % | 60 | % | |||||
Dividend yield | — | — | — | ||||||||
Weighted average grant date fair value per option granted | $ | 3.14 | $ | 4.46 | $ | 2.49 |
Number of Shares (In thousands) | Weighted Average Grant Date Fair Value (Per Share) | |||||
Nonvested at December 31, 2014 | 660 | $ | 4.58 | |||
Awards granted | 49 | 7.30 | ||||
Awards vested | (289 | ) | 4.79 | |||
Awards forfeited | (35 | ) | 4.46 | |||
Nonvested at December 31, 2015 | 385 | $ | 4.78 |
5. | Other Income and Expense |
December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Interest income | $ | (2,539 | ) | $ | (3,359 | ) | $ | (3,785 | ) | ||
Foreign currency gain, net | (7,849 | ) | (9,808 | ) | (5,626 | ) | |||||
Loss on debt retirement | 9,560 | 757 | 12,330 | ||||||||
Loss from acquisition of J-Devices (Note 3) | 13,878 | — | — | ||||||||
Gain on sale of subsidiary to J-Devices (Note 3) | — | (9,155 | ) | — | |||||||
Other income, net | (2,122 | ) | (2,978 | ) | (705 | ) | |||||
Total other (income) expense, net | $ | 10,928 | $ | (24,543 | ) | $ | 2,214 |
6. | Income Taxes |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
United States | $ | (39,684 | ) | $ | 16,571 | $ | (36,829 | ) | |||
Foreign | 107,219 | 119,507 | 160,816 | ||||||||
Total income before income taxes | $ | 67,535 | $ | 136,078 | $ | 123,987 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Current | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | 11 | (46 | ) | — | |||||||
Foreign | 28,721 | 51,081 | 30,902 | ||||||||
28,732 | 51,035 | 30,902 | |||||||||
Deferred | |||||||||||
Federal | — | — | (8,556 | ) | |||||||
State | — | — | 9 | ||||||||
Foreign | (697 | ) | (17,190 | ) | 291 | ||||||
(697 | ) | (17,190 | ) | (8,256 | ) | ||||||
Total provision | $ | 28,035 | $ | 33,845 | $ | 22,646 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
U.S. federal tax at 35% | $ | 23,637 | $ | 47,627 | $ | 43,396 | |||||
State taxes, net of federal benefit | 2,622 | 1,940 | 1,124 | ||||||||
Foreign income taxed at different rates | (11,756 | ) | 6,579 | (17,814 | ) | ||||||
Foreign exchange (loss) gain | (5,680 | ) | (17,321 | ) | 844 | ||||||
Change in valuation allowance | 18,259 | (13,527 | ) | (32,415 | ) | ||||||
Adjustments related to prior years | (912 | ) | 3,643 | 2,727 | |||||||
Income tax credits generated | (1,919 | ) | (2,557 | ) | (2,622 | ) | |||||
Repatriation of foreign earnings and profits | 91 | 3,958 | 6,499 | ||||||||
Expiration of capital loss carryforward | — | — | 15,555 | ||||||||
Expiration of net operating losses | 74 | 2,534 | — | ||||||||
Non-deductible loss on acquisition of J-Devices (Note 3) | 4,857 | — | — | ||||||||
Debt conversion costs | — | — | 4,067 | ||||||||
Other | (1,238 | ) | 969 | 1,285 | |||||||
Total | $ | 28,035 | $ | 33,845 | $ | 22,646 |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Net operating loss carryforwards | $ | 147,056 | $ | 120,639 | |||
Income tax credits | 27,212 | 24,754 | |||||
Property, plant and equipment | 21,921 | 19,796 | |||||
Accrued liabilities | 62,016 | 76,682 | |||||
Unrealized foreign exchange loss | 869 | 4,947 | |||||
Other | 16,659 | 12,963 | |||||
Total deferred tax assets | 275,733 | 259,781 | |||||
Valuation allowance | (168,105 | ) | (149,847 | ) | |||
Total deferred tax assets net of valuation allowance | 107,628 | 109,934 | |||||
Deferred tax liabilities: | |||||||
Property, plant and equipment | 31,345 | 27,921 | |||||
Deferred gain | 3,716 | 5,036 | |||||
Other | 6,713 | 2,844 | |||||
Total deferred tax liabilities | 41,774 | 35,801 | |||||
Net deferred tax assets | $ | 65,854 | $ | 74,133 | |||
Recognized as: | |||||||
Other current assets | $ | — | $ | 21,864 | |||
Other assets | 70,784 | 54,950 | |||||
Accrued expenses | — | (1,092 | ) | ||||
Other non-current liabilities | (4,930 | ) | (1,589 | ) | |||
Total | $ | 65,854 | $ | 74,133 |
For the Year Ended December 31, | |||||||||
2015 | 2014 | Expiration | |||||||
(In thousands) | |||||||||
U.S. Federal NOL’s | $ | 363,648 | $ | 317,841 | 2021-2035 | ||||
U.S. State NOL’s | 182,420 | 173,756 | 2016-2035 | ||||||
Foreign NOL’s | 64,999 | 4,962 | 2017-2025 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | 12,670 | $ | 27,128 | $ | 8,218 | |||||
Additions based on tax positions related to the current year | 2,341 | 6,032 | 17,752 | ||||||||
Additions for tax positions of prior years | 3,341 | 1,240 | 2,723 | ||||||||
Reductions for tax positions of prior years | (4,815 | ) | (15,433 | ) | (108 | ) | |||||
Reductions related to settlements with tax authorities | — | (6,297 | ) | (1,353 | ) | ||||||
Reductions from lapse of statutes of limitations | (591 | ) | — | (104 | ) | ||||||
Balance at December 31 | $ | 12,946 | $ | 12,670 | $ | 27,128 |
7. | Earnings Per Share |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands, except per share data) | |||||||||||
Net income attributable to Amkor | $ | 56,812 | $ | 130,386 | $ | 109,296 | |||||
Income allocated to participating securities | (65 | ) | (372 | ) | (681 | ) | |||||
Net income available to Amkor common stockholders — basic | 56,747 | 130,014 | 108,615 | ||||||||
Adjustment for dilutive securities on net income: | |||||||||||
Net income reallocated to participating securities | — | 6 | 93 | ||||||||
Interest on 6.0% convertible notes due 2014, net of tax | — | 1,039 | 9,440 | ||||||||
Net income attributable to Amkor — diluted | $ | 56,747 | $ | 131,059 | $ | 118,148 | |||||
Weighted average shares outstanding — basic | 236,850 | 230,710 | 187,032 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options and restricted share awards | 320 | 712 | 21 | ||||||||
6.0% convertible notes due 2014 | — | 5,309 | 48,277 | ||||||||
Weighted average shares outstanding — diluted | 237,170 | 236,731 | 235,330 | ||||||||
Net income attributable to Amkor per common share: | |||||||||||
Basic | $ | 0.24 | $ | 0.56 | $ | 0.58 | |||||
Diluted | 0.24 | 0.55 | 0.50 |
For the Year Ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
(In thousands) | ||||||||
Stock options and restricted share awards | 1,858 | 1,303 | 4,890 |
8. | Factoring of Accounts Receivable |
9. | Inventories |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Raw materials and purchased components | $ | 163,024 | $ | 161,942 | |||
Work-in-process | 75,181 | 61,437 | |||||
Total inventories | $ | 238,205 | $ | 223,379 |
10. | Property, Plant and Equipment |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Land | $ | 237,815 | $ | 207,985 | |||
Land use rights | 26,845 | 26,845 | |||||
Buildings and improvements | 1,010,201 | 940,846 | |||||
Machinery and equipment | 4,226,401 | 3,953,891 | |||||
Software and computer equipment | 197,266 | 185,243 | |||||
Furniture, fixtures and other equipment | 21,259 | 15,347 | |||||
Construction in progress | 352,607 | 39,261 | |||||
Total property, plant and equipment | 6,072,394 | 5,369,418 | |||||
Less accumulated depreciation and amortization | (3,493,377 | ) | (3,162,942 | ) | |||
Total property, plant and equipment, net | $ | 2,579,017 | $ | 2,206,476 |
11. | Goodwill |
(in thousands) | |||
Balance as of December 31, 2014 | $ | — | |
Goodwill acquired | 19,443 | ||
Balance as of December 31, 2015 | $ | 19,443 |
12. | Accrued Expenses |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Payroll and benefits | $ | 95,011 | $ | 77,635 | |||
Deferred revenue and customer advances | 49,243 | 56,829 | |||||
Accrued settlement costs | 32,987 | 32,414 | |||||
Income taxes payable | 21,448 | 31,580 | |||||
Accrued severance plan obligations (Note 14) | 14,306 | 13,226 | |||||
Accrued interest | 12,920 | 15,947 | |||||
Other accrued expenses | 38,297 | 31,366 | |||||
Total accrued expenses | $ | 264,212 | $ | 258,997 |
13. | Debt |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Debt of Amkor Technology, Inc.: | |||||||
Senior secured credit facilities: | |||||||
$200 million revolving credit facility, LIBOR plus 1.25%-1.75%, due December 2019 (1) | $ | 100,000 | $ | — | |||
Senior notes: | |||||||
7.375% Senior notes, due May 2018 (2) | — | 345,000 | |||||
6.625% Senior notes, due June 2021, $75 million related party | 400,000 | 400,000 | |||||
6.375% Senior notes, due October 2022 | 525,000 | 525,000 | |||||
Debt of subsidiaries: | |||||||
Amkor Technology Korea, Inc. (10): | |||||||
$41 million revolving credit facility, foreign currency funding-linked base rate plus 1.60%, due June 2016 (3) | 40,000 | — | |||||
Term loan, LIBOR plus 2.60%, due May 2018 (4) | 120,000 | — | |||||
Term loan, LIBOR plus 2.70%, due December 2019 (5) | 70,000 | 70,000 | |||||
Term loan, foreign currency funding-linked base rate plus 1.35%, due May 2020 (6) | 150,000 | — | |||||
Term loan, foreign currency funding-linked base rate plus 1.35%, due May 2020 (7) | 80,000 | — | |||||
Term Loan, fund floating rate plus 1.60%, due June 2020 (8) | 40,000 | — | |||||
Term loan, LIBOR plus 3.70%, due June 2016 (9) | — | 70,000 | |||||
Term loan, foreign currency funding-linked base rate plus 1.80%, due March 2017 (7) | — | 80,000 | |||||
Term loan, LIBOR plus 3.70%, due July 2017 (9) | — | 30,000 | |||||
Term loan, foreign currency funding-linked base rate plus 1.75%, due September 2017 (8) | — | 5,000 | |||||
J-Devices Corporation (11)(15): | |||||||
Short-term credit facilities, variable rate, due February and June 2016 (12) | 15,582 | — | |||||
Short-term credit facility, fixed rate at 0.50%, due June 2016 (12) | 5,808 | — | |||||
Term loans, TIBOR plus 1.00%, due June and November 2016 (13) | 2,800 | — | |||||
Term loans, fixed rate at 0.53%, due April 2018 (14) | 31,465 | — | |||||
Amkor Technology Taiwan Ltd.: | |||||||
Revolving credit facility, TAIFX plus a bank-determined spread, due November 2020 (16) | 10,000 | — | |||||
1,590,655 | 1,525,000 | ||||||
Add: Unamortized premium | 5,222 | 5,824 | |||||
Less: Short-term borrowings and current portion of long-term debt | (76,770 | ) | (5,000 | ) | |||
Long-term debt (including related party) | $ | 1,519,107 | $ | 1,525,824 |
(1) | Our $200.0 million senior secured revolving credit facility has a letter of credit sub-limit of $25.0 million. As of December 31, 2015, the borrowing base of our revolving credit facility is $164.8 million, which is adjusted based |
(2) | In June 2015, we redeemed all $345.0 million aggregate principal amount of our outstanding 7.375% Senior Notes due 2018 ("Notes"). In accordance with the terms of the indenture governing the Notes, the redemption price was 101.844% of the principal amount of the Notes. We recorded a $6.4 million loss on extinguishment related to the premium paid on the call of the Notes and a $2.5 million charge for the write-off of the associated unamortized debt issuance costs. The redemption of the Notes was funded with cash on hand and borrowings under our credit facilities. |
(3) | In June 2012, we entered into a $41.0 million revolving credit facility. Principal is payable at maturity. In February 2015, the facility was amended to lower the interest rate. As of December 31, 2015, $1.0 million was available to be drawn. |
(4) | In May 2015, we entered into a term loan agreement pursuant to which we may borrow up to $120.0 million through May 2016 for working capital purposes. Principal is payable at maturity. |
(5) | In November 2012, we entered into a term loan agreement pursuant to which we could borrow up to $100.0 million through March 2014. Principal is payable upon maturity. In April 2015, the term loan was amended and now bears interest at LIBOR plus 2.70%. |
(6) | In May 2015, we entered into a term loan agreement pursuant to which we borrowed $150.0 million for the repayment of inter-company debt. Principal is payable in semiannual installments of $30.0 million beginning in May 2019, with the remaining balance due at maturity. In December 2015, the term loan was amended and now bears interest at a foreign currency funding-linked base rate plus 1.35%. |
(7) | In May 2015, we entered into a term loan agreement pursuant to which we borrowed $80.0 million, replacing the existing term loan due March 2017 with that bank. Principal is payable in semiannual installments of $10.0 million beginning in May 2019, with the remaining due at maturity. In December 2015, the term loan was amended and now bears interest at a foreign currency funding-linked base rate plus 1.35%. |
(8) | In May 2015, we entered into a term loan agreement pursuant to which we may borrow up to $150.0 million through November 2016 for capital expenditures and terminated the term loan due September 2017. Principal is payable at maturity. At December 31, 2015, $110.0 million was available to be borrowed. |
(9) | During the three months ended June 30, 2015, the outstanding balance was prepaid. |
(10) | The loans in Korea are collateralized by substantially all the land, factories and equipment located at our facilities in Korea. |
(11) | As of December 31, 2015, we have consolidated the debt of J-Devices. |
(12) | Short term credit facilities of ¥2.6 billion ($21.4 million) mature semi-annually. The facilities are renewed at each maturity. Principal is payable in monthly installments. |
(13) | Term loan agreements of ¥0.3 billion ($2.8 million) where principal is payable in monthly installments. |
(14) | Term loan agreements of ¥3.8 billion ($31.5 million) where principal is payable in quarterly installments. |
(15) | J-Devices has $23.5 million of debt collateralized by $85.2 million of land, factories and equipment located at our facilities in Japan. |
(16) | In November 2015, we entered into a $39.0 million revolving credit facility. Principal is payable at maturity. The first $30.0 million will be collateralized by land and equipment. The remaining $9.0 million is not collateralized. As of December 31, 2015, $29.0 million was available to be drawn. |
Variable Interest Rates at December 31, | |||||
2015 | 2014 | ||||
Amkor Technology, Inc.: | |||||
$200 million revolving credit facility, LIBOR plus 1.25%-1.75%, due December 2019 | 2.13 | % | — | % | |
Amkor Technology Korea, Inc.: | |||||
$41 million revolving credit facility, foreign currency funding-linked base rate plus 1.60%, due | 3.32 | % | — | % | |
Term loan, LIBOR plus 2.60%, due May 2018 | 2.99 | % | — | % | |
Term loan, LIBOR plus 2.70%, due December 2019 | 3.02 | % | 3.93 | % | |
Term loan, foreign currency funding-linked base rate plus 1.35%, due May 2020 | 3.19 | % | — | % | |
Term loan, foreign currency funding-linked base rate plus 1.35%, due May 2020 | 3.19 | % | — | % | |
Term Loan, fund floating rate plus 1.60%, due June 2020 | 2.32 | % | — | % | |
Term loan, LIBOR plus 3.70%, due June 2016 | — | % | 3.96 | % | |
Term loan, foreign currency funding-linked base rate plus 1.80%, due March 2017 | — | % | 3.49 | % | |
Term loan, LIBOR plus 3.70%, due July 2017 | — | % | 3.93 | % | |
Term loan, foreign currency funding-linked base rate plus 1.75%, due September 2017 | — | % | 3.28 | % | |
J-Devices Corporation: | |||||
Short-term credit facilities, variable rate, due February and June 2016 | 0.46 | % | — | % | |
Term loans, TIBOR plus 1.00%, due June and November 2016 | 1.13 | % | — | % | |
Amkor Technology Taiwan Ltd.: | |||||
Revolving credit facility, TAIFX plus a bank-determined spread, due November 2020 | 1.66 | % | — | % |
Total Debt | |||
(In thousands) | |||
Payments due for the year ending December 31, | |||
2016 | $ | 76,770 | |
2017 | 12,579 | ||
2018 | 126,306 | ||
2019 | 250,000 | ||
2020 | 200,000 | ||
Thereafter | 925,000 | ||
Total debt | $ | 1,590,655 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Balance at the beginning of year | $ | 146,880 | $ | 145,373 | $ | 126,762 | |||||
Provision of severance benefits | 21,088 | 17,593 | 26,550 | ||||||||
Severance payments | (15,021 | ) | (10,160 | ) | (10,402 | ) | |||||
(Gain) loss on foreign currency | (9,796 | ) | (5,926 | ) | 2,463 | ||||||
143,151 | 146,880 | 145,373 | |||||||||
Payments remaining with the National Pension Fund | (192 | ) | (219 | ) | (241 | ) | |||||
Total severance obligation balance at the end of year | 142,959 | 146,661 | 145,132 | ||||||||
Less current portion of accrued severance obligation (Note 12) | 14,306 | 13,226 | 11,197 | ||||||||
Non-current portion of severance obligation | $ | 128,653 | $ | 133,435 | $ | 133,935 |
For the Year Ended December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation at beginning of year | $ | 74,009 | $ | 81,572 | |||
Service cost | 12,481 | 5,042 | |||||
Interest cost | 2,954 | 3,051 | |||||
Benefits paid | (3,924 | ) | (2,620 | ) | |||
Actuarial (gains) losses | (2,631 | ) | 3,514 | ||||
Acquisition (Note 3) | 31,859 | — | |||||
Divestiture (Note 3) | — | (14,814 | ) | ||||
Foreign exchange gain | (5,053 | ) | (1,736 | ) | |||
Projected benefit obligation at end of year | 109,695 | 74,009 | |||||
Change in plan assets: | |||||||
Fair value of plan assets at beginning of year | 54,771 | 50,304 | |||||
Actual gain on plan assets | 1,564 | 4,149 | |||||
Employer contributions | 12,190 | 3,756 | |||||
Acquisition (Note 3) | 13,935 | — | |||||
Benefits paid | (3,924 | ) | (2,620 | ) | |||
Foreign exchange loss | (2,494 | ) | (818 | ) | |||
Fair value of plan assets at end of year | 76,042 | 54,771 | |||||
Funded status of the Plans at end of year | $ | (33,653 | ) | $ | (19,238 | ) |
Prior Service Cost | Actuarial Net (Loss) Gain | Total | |||||||||
(In thousands) | |||||||||||
Balance at December 31, 2013, net of tax | $ | 438 | $ | (1,451 | ) | $ | (1,013 | ) | |||
Amortization included in net periodic pension cost | 102 | 110 | 212 | ||||||||
Net gain arising during period | — | (1,724 | ) | (1,724 | ) | ||||||
Adjustments to unrealized components of defined benefit pension plan included in other comprehensive income | 102 | (1,614 | ) | (1,512 | ) | ||||||
Balance at December 31, 2014, net of tax | $ | 540 | $ | (3,065 | ) | $ | (2,525 | ) | |||
Amortization included in net periodic pension cost | 20 | 68 | 88 | ||||||||
Net gain arising during period | — | 1,012 | 1,012 | ||||||||
Adjustments to unrealized components of defined benefit pension plan included in other comprehensive income | 20 | 1,080 | 1,100 | ||||||||
Balance at December 31, 2015, net of tax | $ | 560 | $ | (1,985 | ) | $ | (1,425 | ) | |||
Estimated amortization of cost to be included in 2016 net periodic pension cost | $ | 35 | $ | 94 | $ | 129 |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Plans with underfunded or non-funded projected benefit obligation: | |||||||
Aggregate projected benefit obligation | $ | 101,832 | $ | 74,044 | |||
Aggregate fair value of plan assets | 67,622 | 54,771 | |||||
Plans with underfunded or non-funded accumulated benefit obligation: | |||||||
Aggregate accumulated benefit obligation | 40,428 | 11,854 | |||||
Aggregate fair value of plan assets | 13,944 | — |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Components of net periodic pension cost and total pension expense: | |||||||||||
Service cost | $ | 12,481 | $ | 5,042 | $ | 5,909 | |||||
Interest cost | 2,954 | 3,051 | 3,170 | ||||||||
Expected return on plan assets | (3,330 | ) | (3,094 | ) | (3,508 | ) | |||||
Amortization of prior service cost | 34 | 116 | 231 | ||||||||
Recognized actuarial loss | 91 | 141 | 142 | ||||||||
Net periodic pension cost | 12,230 | 5,256 | 5,944 | ||||||||
Curtailment gain | — | — | (176 | ) | |||||||
Settlement loss (gain) | 27 | 97 | (120 | ) | |||||||
Total pension expense | $ | 12,257 | $ | 5,353 | $ | 5,648 |
For the Year Ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Discount rate for determining net periodic pension cost | 4.2 | % | 3.9 | % | 3.9 | % | ||
Discount rate for determining benefit obligations at year end | 3.3 | % | 4.2 | % | 3.9 | % | ||
Rate of compensation increase for determining net periodic pension cost | 4.7 | % | 4.1 | % | 4.1 | % | ||
Rate of compensation increase for determining benefit obligations at year end | 3.9 | % | 4.7 | % | 4.1 | % | ||
Expected rate of return on plan assets for determining net periodic pension cost | 6.2 | % | 6.2 | % | 6.3 | % |
Allocation | ||||||||
Debt | Equity | Other | ||||||
Japan defined benefit plan | 55 | % | 43 | % | 2 | % | ||
Korean defined benefit plan | 40 | % | 50 | % | 10 | % | ||
Philippine defined benefit plan | 38 | % | 57 | % | 5 | % |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Cash and cash equivalents (Level 1) | $ | 14,944 | $ | 5,742 | |||
Equity securities | |||||||
Foreign securities (Level 1) | 10,689 | 3,035 | |||||
U.S. securities (Level 1) | 19,498 | 19,790 | |||||
U.S. securities (Level 3) | 3 | — | |||||
30,190 | 22,825 | ||||||
Fixed income funds (Level 1) | 3,492 | 4,321 | |||||
Bonds | |||||||
U.S. government bonds (Level 1) | 2,187 | — | |||||
U.S. government bonds (Level 2) | — | 2,840 | |||||
Foreign government bonds (Level 1) | 880 | — | |||||
Foreign government bonds (Level 2) | 8,092 | — | |||||
Foreign government bonds (Level 3) | 842 | — | |||||
Foreign treasury notes (Level 1) | 6,665 | 10,156 | |||||
18,666 | 12,996 | ||||||
Taiwan retirement fund (Level 1) | 8,621 | 8,632 | |||||
Other (Level 2) | 129 | 255 | |||||
Total | $ | 76,042 | $ | 54,771 |
Payments | |||
(In thousands) | |||
2016 | $ | 3,480 | |
2017 | 5,284 | ||
2018 | 6,397 | ||
2019 | 8,975 | ||
2020 | 11,188 | ||
2021 to 2025 | 86,941 |
15. | Accumulated Other Comprehensive Income (Loss) |
Defined Benefit Pension | Foreign Currency Translation | Equity Interest in J-Devices' Other Comprehensive Income (Loss) | Total | ||||||||||||
(In thousands) | |||||||||||||||
Accumulated other comprehensive (loss) income at December 31, 2013 | $ | (1,013 | ) | $ | 11,451 | $ | (10,693 | ) | $ | (255 | ) | ||||
Other comprehensive (loss) income before reclassifications | (1,724 | ) | 623 | (19,136 | ) | (20,237 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | 212 | (12,587 | ) | — | (12,375 | ) | |||||||||
Other comprehensive loss | (1,512 | ) | (11,964 | ) | (19,136 | ) | (32,612 | ) | |||||||
Accumulated other comprehensive loss at December 31, 2014 | $ | (2,525 | ) | $ | (513 | ) | $ | (29,829 | ) | $ | (32,867 | ) | |||
Other comprehensive income (loss) before reclassifications | 1,012 | (146 | ) | (135 | ) | 731 | |||||||||
Amounts reclassified from accumulated other comprehensive loss | 88 | — | 29,964 | 30,052 | |||||||||||
Other comprehensive income (loss) | 1,100 | (146 | ) | 29,829 | 30,783 | ||||||||||
Accumulated other comprehensive loss at December 31, 2015 | $ | (1,425 | ) | $ | (659 | ) | $ | — | $ | (2,084 | ) |
16. | Fair Value Measurements |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Cash equivalent money market funds (Level 1) | $ | 81,473 | $ | 145,938 | |||
Restricted cash money market funds (Level 1) | 2,000 | 2,681 |
December 31, 2015 | December 31, 2014 | ||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||
(In thousands) | |||||||||||||||
Senior notes (Level 1) | $ | 902,563 | $ | 930,222 | $ | 1,268,619 | $ | 1,275,824 | |||||||
Revolving credit facilities and term loans (Level 2) | 664,085 | 665,655 | 254,999 | 255,000 | |||||||||||
Total debt | $ | 1,566,648 | $ | 1,595,877 | $ | 1,523,618 | $ | 1,530,824 |
17. | Commitments and Contingencies |
Lease Payments | |||
(In thousands) | |||
2016 | $ | 21,870 | |
2017 | 15,316 | ||
2018 | 9,131 | ||
2019 | 8,526 | ||
2020 | 5,082 | ||
Thereafter | 12,218 | ||
Total | $ | 72,143 |
18. | Business Segments, Customer Concentrations and Geographic Information |
• | We are managed under a functionally-based organizational structure with the head of each function reporting directly to the CODM; |
• | We assess performance, including incentive compensation, based on consolidated operating performance and financial results; |
• | Our CODM allocates resources and makes other operating decisions based on specific customer business opportunities and |
• | We have an integrated process for the design, development and manufacturing services we provide to all of our customers. We also have centralized sales and administrative functions. |
Net Sales for the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Advanced products | $ | 1,432,493 | $ | 1,552,948 | $ | 1,451,664 | |||||
Mainstream products | 1,452,110 | 1,576,492 | 1,504,786 | ||||||||
Total net sales | $ | 2,884,603 | $ | 3,129,440 | $ | 2,956,450 |
Net Sales for the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
China | $ | 299,643 | $ | 270,282 | $ | 47,202 | |||||
Ireland | 180,903 | 175,095 | 97,180 | ||||||||
Japan | 138,494 | 268,420 | 394,834 | ||||||||
Malaysia | 276,198 | 119,889 | 106,767 | ||||||||
Singapore | 449,570 | 432,942 | 496,601 | ||||||||
Taiwan | 166,185 | 212,719 | 144,825 | ||||||||
Other foreign countries | 461,600 | 518,670 | 463,827 | ||||||||
Total foreign countries | 1,972,593 | 1,998,017 | 1,751,236 | ||||||||
United States | 912,010 | 1,131,423 | 1,205,214 | ||||||||
Total net sales | $ | 2,884,603 | $ | 3,129,440 | $ | 2,956,450 |
Property, Plant and Equipment, Net at December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
China | $ | 513,175 | $ | 575,207 | |||
Japan | 230,436 | 145 | |||||
Korea | 1,124,435 | 948,192 | |||||
Malaysia | 39,037 | 50,137 | |||||
Philippines | 328,604 | 301,291 | |||||
Taiwan | 330,604 | 317,192 | |||||
Other foreign countries | 261 | 293 | |||||
Total foreign countries | 2,566,552 | 2,192,457 | |||||
United States | 12,465 | 14,019 | |||||
Total property, plant and equipment, net | $ | 2,579,017 | $ | 2,206,476 |
Balance at Beginning of Period | Additions (Credited) Charged to Expense | Write-offs | (a) Other | Balance at End of Period | ||||||||||||
(In thousands) | ||||||||||||||||
Deferred tax asset valuation allowance: | ||||||||||||||||
Year ended December 31, 2013 | $ | 209,757 | (16,860 | ) | (15,555 | ) | 1,841 | $ | 179,183 | |||||||
Year ended December 31, 2014 | 179,183 | (10,838 | ) | (2,534 | ) | (15,964 | ) | 149,847 | ||||||||
Year ended December 31, 2015 | 149,847 | 18,507 | (248 | ) | (1 | ) | 168,105 |
(a) | Column represents adjustments to the deferred tax asset valuation allowance directly through stockholders’ equity for changes in accumulated other comprehensive income (loss) related to our foreign defined benefit pension plans and the sale of a subsidiary in 2014. |
Item 9. | Changes In and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
Item 9B. | Other Information |
Item 10. | Directors, Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
(a) Number of Securities to be Issued Upon Exercise of Outstanding Options (In thousands) | (b) Weighted-Average Exercise Price of Outstanding Options | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a) (In thousands) | |||||||
Equity compensation plan approved by stockholders (1) | 3,727 | $ | 6.49 | 11,491 | |||||
Equity compensation plans not approved by stockholders | — | — | — | ||||||
Total equity compensation plans | 3,727 | 11,491 |
(1) | As of December 31, 2015, a total of 11.5 million shares were reserved for issuance under the 2007 Plan. Shares available for issuance under our 2007 Plan can be granted pursuant to stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares. |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accountant Fees and Services |
Item 15. | Exhibits and Financial Statement Schedules |
By: | /s/ Stephen D. Kelley | |
Stephen D. Kelley President and Chief Executive Officer | ||
Date: | February 22, 2016 |
Name | Title | Date | ||
/s/ Stephen D. Kelley | President and Chief Executive Officer | February 22, 2016 | ||
Stephen D. Kelley | ||||
/s/ Joanne Solomon | Executive Vice President and Chief Financial Officer | February 22, 2016 | ||
Joanne Solomon | ||||
/s/ James J. Kim | Executive Chairman | February 22, 2016 | ||
James J. Kim | ||||
/s/ John T. Kim | Executive Vice Chairman | February 22, 2016 | ||
John T. Kim | ||||
/s/ Susan Y. Kim | Director | February 22, 2016 | ||
Susan Y. Kim | ||||
/s/ Roger A. Carolin | Director | February 22, 2016 | ||
Roger A. Carolin | ||||
/s/ Winston J. Churchill | Director | February 22, 2016 | ||
Winston J. Churchill |
Name | Title | Date | ||
/s/ Robert R. Morse | Director | February 22, 2016 | ||
Robert R. Morse | ||||
/s/ John F. Osborne | Director | February 22, 2016 | ||
John F. Osborne | ||||
/s/ David N. Watson | Director | February 22, 2016 | ||
David N. Watson | ||||
/s/ James W. Zug | Director | February 22, 2016 | ||
James W. Zug |
2.1 | Sales Contract of Commodity Premises between Shanghai Waigaoqiao Free Trade Zone Xin Development Co., Ltd. and Amkor Assembly & Test (Shanghai) Co., Ltd. dated May 7, 2004.(4) | ||
3.1 | Certificate of Incorporation.(1) | ||
3.2 | Certificate of Correction to Certificate of Incorporation.(3) | ||
3.3 | Restated Bylaws as amended on November 5, 2013.(21) | ||
4.1 | Specimen Common Stock Certificate.(2) | ||
4.2 | Indenture, dated May 4, 2010, by and between Amkor Technology, Inc. and U.S. Bank National Association, as trustee, regarding the 7.375% Senior Notes due 2018.(9) | ||
4.3 | Indenture, dated May 20, 2011, by and between Amkor Technology, Inc. and U.S. Bank National Association, as trustee, regarding the 6.625% Senior Notes due 2021.(11) | ||
4.4 | Letter Agreement, dated May 17, 2011, between Amkor Technology, Inc., James J. Kim and 915 Investments, LP.(11) | ||
4.5 | Indenture, dated September 21, 2012, by and between Amkor Technology, Inc. and U.S. Bank National Association, as trustee, regarding the 6.375% Senior Notes due 2022.(15) | ||
10.1 | Form of Indemnification Agreement for directors and officers.(2) | ||
10.2 | 1998 Stock Plan, as amended.(7)* | ||
10.3 | Form of Stock Option Agreement under the 1998 Stock Plan.(5)* | ||
10.4 | Contract of Lease between Corinthian Commercial Corporation and Amkor/Anam Pilipinas Inc., dated October 1, 1990.(1) | ||
10.5 | Contract of Lease between Salcedo Sunvar Realty Corporation and Automated Microelectronics, Inc., dated May 6, 1994.(1) | ||
10.6 | Lease Contract between AAPI Realty Corporation and Amkor/Anam Advanced Packaging, Inc., dated November 6, 1996.(1) | ||
10.7 | 2003 Nonstatutory Inducement Grant Stock Plan, as amended.(7)* | ||
10.8 | Amended and Restated 2007 Equity Incentive Plan.(12)* | ||
10.9 | Form of Stock Option Award Agreement under the Amended and Restated 2007 Equity Incentive Plan.(23)* | ||
10.10 | Form of Restricted Stock Award Agreement under the Amended and Restated 2007 Equity Incentive Plan. (14)* | ||
10.11 | Executive Incentive Bonus Plan.(12)* | ||
10.12 | Kun-Mortgage Agreement, dated March 30, 2007, between Woori Bank and Amkor Technology Korea, Inc.(6) | ||
10.13 | 2009 Voting Agreement, dated as of March 26, 2009, between Amkor Technology, Inc., James J. Kim and 915 Investments, LP.(8) | ||
10.14 | Second Amended and Restated Loan and Security Agreement, dated as of June 28, 2012, among Amkor Technology, Inc., its subsidiaries from time to time party thereto, the lending institutions from time to time party thereto and Bank of America, N.A., as administrative agent.(13) | ||
10.15 | First Amendment, dated December 24, 2014, to Second Amended and Restated Loan and Security Agreement, dated as of June 28, 2012, among Amkor Technology, Inc., its subsidiaries from time to time party thereto, the lending institutions from time to time party thereto and Bank of America, N.A., as administrative agent.(22) | ||
10.16 | Amendment to Kun-Mortgage Agreement, dated May 24, 2010, by and between Amkor Technology Korea, Inc. and Woori Bank.(10) | ||
10.17 | Loan Agreement, dated June 28, 2012, by and between Amkor Technology Korea, Inc. and The Korea Development Bank (13) | ||
10.18 | Factory Mortgage Agreement, dated June 28, 2012, by and between The Korea Development Bank and Amkor Technology Korea, Inc.(13) | ||
10.19 | Loan Agreement, dated November 23, 2012, by and between Amkor Technology Korea, Inc. and The Korea Development Bank.(16) |
10.20 | Form of Amendment to Factory Mortgage Agreement, dated November 23, 2012, by and between The Korea Development Bank and Amkor Technology Korea, Inc.(16) | ||
10.21 | Amendment to Loan Agreement, dated November 22, 2013, by and between Amkor Technology Korea, Inc. and The Korea Development Bank(21) | ||
10.22 | Credit Facility Agreement, dated March 11, 2013, by and between Amkor Technology Korea, Inc. and Woori Bank(17) | ||
10.23 | General Terms and Conditions for Bank Credit Transactions, dated March 11, 2013, by and between Amkor Technology Korea, Inc. and Woori Bank(17) | ||
10.24 | Loan Agreement, dated April 29, 2013, by and between Amkor Technology Korea, Inc. and The Korea Development Bank.(20) | ||
10.25 | Amendment to Factory Mortgage Agreement, dated April 29, 2013, by and between Amkor Technology Korea, Inc. and The Korea Development Bank.(20) | ||
10.26 | Guarantee, dated April 29, 2013, by and between Amkor Technology, Inc. and The Korea Development Bank.(20) | ||
10.27 | Amendment to Loan Agreement, dated December 27, 2013, by and between Amkor Technology Korea, Inc. and The Korea Development Bank.(21) | ||
10.28 | Amendment to Kun Mortgage Agreement, dated April 19, 2013, by and between Amkor Technology Korea, Inc. and Woori Bank.(20) | ||
10.29 | Employment Offer Letter, dated April 30, 2013, between Amkor Technology, Inc. and Stephen D. Kelley.(18)* | ||
10.30 | Retirement Agreement and Release, dated May 8, 2013, between Amkor Technology, Inc. and Kenneth T. Joyce.(19)* | ||
10.31 | Separation and Consulting Agreement, dated July 17, 2013, between Amkor Technology, Inc. and Michael J. Lamble.(20)* | ||
10.32 | Amendment No. 1 to Amended and Restated 2007 Equity Incentive Plan.(24)* | ||
10.33 | Form of Outside Director Stock Option Award Agreement under the Amended and Restated 2007 Equity Incentive Plan.(23)* | ||
10.34 | Separation Agreement and Release, dated February 11, 2015, between Amkor Technology, Inc. and JooHo Kim.(23)* | ||
12.1 | Computation of Ratio of Earnings to Fixed Charges | ||
21.1 | List of subsidiaries of the Registrant. | ||
23.1 | Consent of PricewaterhouseCoopers LLP. | ||
23.2 | Consent of PricewaterhouseCoopers Aarata | ||
31.1 | Certification of Stephen D. Kelley, Chief Executive Officer of Amkor Technology, Inc., Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended. | ||
31.2 | Certification of Joanne Solomon, Chief Financial Officer of Amkor Technology, Inc., Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended. | ||
32.1 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
99.1 | Consolidated Financial Statements of J-Devices Corporation | ||
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||
* | Indicates management compensatory plan, contract or arrangement. |
(1) | Incorporated by reference to the Company’s Registration Statement on Form S-1 filed October 6, 1997 (File No. 333-37235). | |
(2) | Incorporated by reference to the Company’s Registration Statement on Form S-1 filed on October 6, 1997, as amended on March 31, 1998 (File No. 333-37235). | |
(3) | Incorporated by reference to the Company’s Registration Statement on Form S-1 filed on April 8, 1998, as amended on August 26, 1998 (File No. 333-49645). | |
(4) | Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 6, 2004. | |
(5) | Incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 16, 2006. | |
(6) | Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed May 4, 2007. | |
(7) | Incorporated by reference to the Company's Quarterly Report on Form 10-Q filed August 7, 2008. | |
(8) | Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 1, 2009. | |
(9) | Incorporated by reference to the Company’s Current Report on Form 8-K filed May 5, 2010. | |
(10) | Incorporated by reference to the Company’s Current Report on Form 8-K filed May 27, 2010. | |
(11) | Incorporated by reference to the Company's Current Report on Form 8-K filed May 20, 2011. | |
(12) | Incorporated by reference to the Company's Proxy Statement on Schedule 14A filed April 5, 2012. | |
(13) | Incorporated by reference to the Company's Current Report on Form 8-K filed on July 2, 2012. | |
(14) | Incorporated by reference to the Company's Quarterly Report on Form 10-Q filed August 2, 2012. | |
(15) | Incorporated by reference to the Company's Current Report on Form 8-K filed September 21, 2012. | |
(16) | Incorporated by reference to the Company's Current Report on Form 8-K filed November 27, 2012. | |
(17) | Incorporated by reference to the Company's Quarterly Report on Form 10-Q filed May 3, 2013. | |
(18) | Incorporated by reference to the Company's Current Report on Form 8-K filed May 3, 2013. | |
(19) | Incorporated by reference to the Company's Current Report on Form 8-K filed May 10, 2013. | |
(20) | Incorporated by reference to the Company's Quarterly Report on Form 10-Q filed August 2, 2013. | |
(21) | Incorporated by reference to the Company's Annual Report on Form 10-K filed February 28, 2014. | |
(22) | Incorporated by reference to the Company's Current Report on Form 8-K filed December 24, 2014. | |
(23) | Incorporated by reference to the Company's Quarterly Report on Form 10-Q filed March 30, 2015. | |
(24) | Incorporated by reference to the Company's Quarterly Report on Form 10-Q filed October 30, 2015. |
Year Ended December 31, | |||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Earnings | |||||||||||||||||||
Income before taxes and equity in earnings of unconsolidated affiliate | $ | 67,535 | $ | 136,078 | $ | 123,987 | $ | 54,111 | $ | 93,134 | |||||||||
Interest expense | 84,713 | 107,688 | 103,027 | 94,280 | 82,869 | ||||||||||||||
Amortization of deferred debt issuance costs and premiums | 1,662 | 2,237 | 2,880 | 3,663 | 3,737 | ||||||||||||||
Interest portion of rent (1) | 8,171 | 9,502 | 7,947 | 4,386 | 5,020 | ||||||||||||||
$ | 162,081 | $ | 255,505 | $ | 237,841 | $ | 156,440 | $ | 184,760 | ||||||||||
Fixed Charges | |||||||||||||||||||
Interest expense | $ | 84,713 | $ | 107,688 | $ | 103,027 | $ | 94,280 | $ | 82,869 | |||||||||
Capitalized interest | 10,079 | 6,912 | 1,740 | — | — | ||||||||||||||
Amortization of debt issuance costs and premiums | 1,662 | 2,237 | 2,880 | 3,663 | 3,737 | ||||||||||||||
Interest portion of rent (1) | 8,171 | 9,502 | 7,947 | 4,386 | 5,020 | ||||||||||||||
$ | 104,625 | $ | 126,339 | $ | 115,594 | $ | 102,329 | $ | 91,626 | ||||||||||
Ratio of earnings to fixed charges | 1.5 | 2.0 | 2.1 | 1.5 | 2.0 |
(1) | Represents one-third of total rent expense which we believe is a reasonable estimate of the interest component of rent expense. |
Subsidiary | Jurisdiction of Organization | |
Amkor Advanced Technology Taiwan, Inc. | Taiwan | |
Amkor Assembly & Test (Shanghai) Co., Ltd. | China | |
Amkor Technology Euroservices, S.A.S. | France | |
Amkor Technology Holding, B.V. | Netherlands | |
Amkor Technology Holding, B.V., Germany (A Branch of a Netherlands Company) | Germany | |
Amkor Technology Japan, K.K. | Japan | |
Amkor Technology Korea, Inc. | Korea | |
Amkor Technology Limited | Cayman Islands | |
Amkor Technology Malaysia Sdn. Bhd. | Malaysia | |
Amkor Technology Philippines, Inc. (A Branch of a Singapore Company) | Philippines | |
Amkor Technology Singapore Investment Pte. Ltd. | Singapore | |
Amkor Technology Singapore Holding Pte. Ltd. | Singapore | |
Amkor Technology Taiwan Ltd. | Taiwan | |
Amkor Worldwide Services LLC | Delaware | |
Guardian Assets, Inc. | Delaware | |
J-Devices Corporation | Japan | |
Unitive International Ltd. | Curacao |
/s/ Stephen D. Kelley | |
By: | Stephen D. Kelley |
Title: | President and Chief Executive Officer |
Date: | February 22, 2016 |
/s/ Joanne Solomon | |
By: | Joanne Solomon |
Title: | Executive Vice President and Chief Financial Officer |
Date: | February 22, 2016 |
/s/ Stephen D. Kelley | |
By: | Stephen D. Kelley |
Title: | President and Chief Executive Officer |
Date: | February 22, 2016 |
/s/ Joanne Solomon | |
By: | Joanne Solomon |
Title: | Executive Vice President and Chief Financial Officer |
Date: | February 22, 2016 |
Page | |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(unaudited) | |||||||||||
(In thousands) | |||||||||||
Net sales | $ | 812,938 | $ | 923,020 | $ | 825,135 | |||||
Cost of sales | 708,212 | 799,778 | 741,357 | ||||||||
Gross profit | 104,726 | 123,242 | 83,778 | ||||||||
Selling, general and administrative | 44,757 | 50,605 | 51,306 | ||||||||
Research and development | 16,522 | 15,914 | 11,633 | ||||||||
Total operating expenses | 61,279 | 66,519 | 62,939 | ||||||||
Operating income | 43,447 | 56,723 | 20,839 | ||||||||
Interest expense | 1,243 | 2,549 | 3,481 | ||||||||
Other income, net | (286 | ) | (14,464 | ) | (3,339 | ) | |||||
Total other expense (income), net | 957 | (11,915 | ) | 142 | |||||||
Income before taxes | 42,490 | 68,638 | 20,697 | ||||||||
Income tax expense | 12,778 | 18,889 | 4,034 | ||||||||
Net income | $ | 29,712 | $ | 49,749 | $ | 16,663 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(unaudited) | |||||||||||
(In thousands) | |||||||||||
Net income | $ | 29,712 | $ | 49,749 | $ | 16,663 | |||||
Other comprehensive income (loss), net of tax | |||||||||||
Adjustments to unrealized components of defined benefit pension plans | 482 | (912 | ) | 2,082 | |||||||
Foreign currency translation adjustment | (74 | ) | (30,569 | ) | (27,836 | ) | |||||
Total other comprehensive income (loss) | 408 | (31,481 | ) | (25,754 | ) | ||||||
Comprehensive income (loss) | $ | 30,120 | $ | 18,268 | $ | (9,091 | ) |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands, except share data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 127,968 | $ | 115,841 | |||
Accounts receivable | 180,177 | 214,164 | |||||
Inventories | 40,611 | 33,053 | |||||
Other current assets | 2,363 | 18,340 | |||||
Total current assets | 351,119 | 381,398 | |||||
Property, plant and equipment, net | 201,323 | 197,393 | |||||
Other assets | 13,202 | 6,746 | |||||
Total assets | $ | 565,644 | $ | 585,537 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Short-term borrowings and current portion of long-term debt | $ | 36,770 | $ | 35,652 | |||
Trade accounts payable | 173,744 | 165,619 | |||||
Capital expenditures payable | 29,471 | 28,837 | |||||
Accrued expenses | 48,189 | 71,515 | |||||
Total current liabilities | 288,174 | 301,623 | |||||
Long-term debt | 18,885 | 44,940 | |||||
Pension obligations | 22,250 | 29,673 | |||||
Other non-current liabilities | 7,229 | 10,315 | |||||
Total liabilities | 336,538 | 386,551 | |||||
Commitments and contingencies (Note 1) | |||||||
Stockholders' Equity: | |||||||
Common stock, no par value, 160,000 shares authorized, 64,445 shares issued and outstanding in 2015 and 2014 | 53,703 | 53,703 | |||||
Additional paid-in capital | 34,197 | 34,197 | |||||
Retained earnings | 197,727 | 168,015 | |||||
Accumulated other comprehensive loss | (56,521 | ) | (56,929 | ) | |||
Total stockholders' equity | 229,106 | 198,986 | |||||
Total liabilities and stockholders' equity | $ | 565,644 | $ | 585,537 |
Additional Paid- In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | |||||||||||||||||||
Common Stock | ||||||||||||||||||||||
Shares | Value | |||||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||||
Balance at December 31, 2012 (unaudited) | 36,826 | $ | 19,506 | $ | — | $ | 101,603 | $ | 306 | $ | 121,415 | |||||||||||
Net income | — | — | — | 16,663 | — | 16,663 | ||||||||||||||||
Other comprehensive loss | — | — | — | — | (25,754 | ) | (25,754 | ) | ||||||||||||||
Issuance of stock | 27,619 | 34,197 | 34,197 | — | — | 68,394 | ||||||||||||||||
Balance at December 31, 2013 (unaudited) | 64,445 | $ | 53,703 | $ | 34,197 | $ | 118,266 | $ | (25,448 | ) | $ | 180,718 | ||||||||||
Net income | — | — | — | 49,749 | — | 49,749 | ||||||||||||||||
Other comprehensive loss | — | — | — | — | (31,481 | ) | (31,481 | ) | ||||||||||||||
Balance at December 31, 2014 | 64,445 | $ | 53,703 | $ | 34,197 | $ | 168,015 | $ | (56,929 | ) | $ | 198,986 | ||||||||||
Net income | — | — | — | 29,712 | — | 29,712 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 408 | 408 | ||||||||||||||||
Balance at December 31, 2015 | 64,445 | $ | 53,703 | $ | 34,197 | $ | 197,727 | $ | (56,521 | ) | $ | 229,106 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(unaudited) | |||||||||||
(In thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 29,712 | $ | 49,749 | $ | 16,663 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 70,609 | 77,238 | 66,062 | ||||||||
Amortization of deferred debt issuance costs and premiums | 63 | 452 | 761 | ||||||||
Deferred income taxes | 5,391 | 112 | (4,723 | ) | |||||||
Gain from acquisition of business | (255 | ) | (14,739 | ) | (2,724 | ) | |||||
Loss on debt retirement | 311 | — | — | ||||||||
Loss on disposal of fixed assets, net | 345 | 2,861 | 507 | ||||||||
Other, net | 135 | 622 | 1,743 | ||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | 34,142 | (19,627 | ) | (99,612 | ) | ||||||
Inventories | (7,493 | ) | 3,495 | 32,059 | |||||||
Other current assets | 759 | 149 | 7,115 | ||||||||
Other assets | (2,465 | ) | (73 | ) | (1,394 | ) | |||||
Trade accounts payable | 7,894 | 4,943 | 112,219 | ||||||||
Accrued expenses | (17,040 | ) | 16,995 | 22,022 | |||||||
Pension obligations | (7,210 | ) | 7,501 | 5,715 | |||||||
Other non-current liabilities | 564 | (244 | ) | (3,315 | ) | ||||||
Net cash provided by operating activities | 115,462 | 129,434 | 153,098 | ||||||||
Cash flows from investing activities: | |||||||||||
Payments for property, plant and equipment | (70,343 | ) | (53,171 | ) | (33,666 | ) | |||||
Proceeds from sale of property, plant and equipment | 285 | 1,941 | 97 | ||||||||
Acquisition of business, net of cash acquired | (1,633 | ) | (3,425 | ) | (59,207 | ) | |||||
Cash received on acquisition of business from Amkor, net of payments | — | 15,777 | — | ||||||||
Proceeds from short-term investment | 66 | — | |||||||||
Other investing activities | 1,535 | (11 | ) | (13 | ) | ||||||
Net cash used in investing activities | (70,090 | ) | (38,889 | ) | (92,789 | ) | |||||
Cash flows from financing activities: | |||||||||||
Borrowings under short-term credit facilities | 38,420 | 28,248 | 30,223 | ||||||||
Payments under short-term credit facilities | (29,779 | ) | (29,970 | ) | (54,323 | ) | |||||
Proceeds from issuance of long-term debt | 38,193 | — | — | ||||||||
Payments of long-term debt | (72,832 | ) | (36,705 | ) | (34,235 | ) | |||||
Payments of capital lease obligations | (1,621 | ) | (1,794 | ) | (1,952 | ) | |||||
Payments of capital lease obligations to Amkor | — | — | (8,843 | ) | |||||||
Proceeds from issuance of stock | — | — | 68,394 | ||||||||
Payments of deferred consideration for acquisition of business from Amkor | (8,355 | ) | — | — | |||||||
Net cash (used in) provided by financing activities | (35,974 | ) | (40,221 | ) | (736 | ) | |||||
Effect of exchange rate fluctuations on cash and cash equivalents | 2,729 | (18,619 | ) | (10,574 | ) | ||||||
Net increase in cash and cash equivalents | 12,127 | 31,705 | 48,999 | ||||||||
Cash and cash equivalents, beginning of period | 115,841 | 84,136 | 35,137 | ||||||||
Cash and cash equivalents, end of period | $ | 127,968 | $ | 115,841 | $ | 84,136 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 1,259 | $ | 2,451 | $ | 1,551 | |||||
Income taxes | 15,679 | 6,446 | 1,406 | ||||||||
Non-cash investing activities: | |||||||||||
Additions to property, plant and equipment included in capital expenditures payable | 29,471 | 28,837 | 19,427 | ||||||||
Equipment acquired through capital leases | 1,754 | 2,161 | 798 |
1. | Description of Business and Summary of Significant Accounting Policies |
Buildings and improvements | 2 to 50 years |
Machinery and equipment | 2 to 8 years |
Software and computer equipment | 2 to 6 years |
Furniture, fixtures and other equipment | 2 to 20 years |
2. | New Accounting Standards |
(In thousands) | |||
Inventories | $ | 40,406 | |
Property, plant and equipment, net | 94,593 | ||
Other Assets | 1,747 | ||
Total assets acquired | 136,746 | ||
Current liabilities | (3,758 | ) | |
Non-current liabilities | (6,195 | ) | |
Total liabilities assumed | (9,953 | ) | |
Net assets acquired | $ | 126,793 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(unaudited) | |||||||||||
(In thousands) | |||||||||||
Foreign currency loss (gain) | $ | 281 | $ | 357 | $ | (415 | ) | ||||
Gain from acquisition of business | (255 | ) | (14,739 | ) | (2,724 | ) | |||||
Other income, net | (312 | ) | (82 | ) | (200 | ) | |||||
Total other income, net | $ | (286 | ) | $ | (14,464 | ) | $ | (3,339 | ) |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(unaudited) | |||||||||||
(In thousands) | |||||||||||
Current | $ | 7,387 | $ | 18,777 | $ | 8,757 | |||||
Deferred | 5,391 | 112 | (4,723 | ) | |||||||
Total provision | $ | 12,778 | $ | 18,889 | $ | 4,034 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(unaudited) | |||||||||||
(In thousands) | |||||||||||
Japan statutory tax at 35% (2015), 36% (2014) and 38% (2013) | $ | 15,033 | $ | 24,710 | $ | 7,815 | |||||
Income tax credits generated | (3,093 | ) | (525 | ) | (3,411 | ) | |||||
Bargain purchase gain | (90 | ) | (5,215 | ) | (550 | ) | |||||
Change in tax rate | 701 | (27 | ) | 32 | |||||||
Other | 227 | (54 | ) | 148 | |||||||
Total | $ | 12,778 | $ | 18,889 | $ | 4,034 |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Net operating loss carryforwards | $ | — | $ | 5,054 | |||
Accounts receivable | 31 | 28 | |||||
Income tax credits | — | 328 | |||||
Accrued liabilities | 14,973 | 21,480 | |||||
Other long term liabilities | 605 | — | |||||
Property, plant and equipment | — | 1,049 | |||||
Other | 780 | 210 | |||||
Total deferred tax assets | 16,389 | 28,149 | |||||
Deferred tax liabilities: | |||||||
Property, plant and equipment | 6,403 | 10,949 | |||||
Deferred gain | 2,281 | 3,613 | |||||
Other | 225 | 357 | |||||
Total deferred tax liabilities | 8,909 | 14,919 | |||||
Net deferred tax assets | $ | 7,480 | $ | 13,230 | |||
Recognized as: | |||||||
Other current assets | $ | — | $ | 15,219 | |||
Other assets | 7,480 | 2,899 | |||||
Other non-current liabilities | — | (4,888 | ) | ||||
Total | $ | 7,480 | $ | 13,230 |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Raw materials and purchased components | $ | 20,950 | $ | 19,038 | |||
Work-in-process | 19,661 | 14,015 | |||||
Total inventories | $ | 40,611 | $ | 33,053 |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Land | $ | 23,789 | $ | 23,760 | |||
Buildings and improvements | 55,060 | 49,579 | |||||
Machinery and equipment | 399,140 | 342,644 | |||||
Software and computer equipment | 20,393 | 16,306 | |||||
Furniture, fixtures and other equipment | 46,087 | 39,769 | |||||
Machinery and equipment under capital lease | 7,858 | 6,264 | |||||
Construction in progress | 6,427 | 10,340 | |||||
Total property, plant and equipment | 558,754 | 488,662 | |||||
Less accumulated depreciation and amortization | (357,431 | ) | (291,269 | ) | |||
Total property, plant and equipment, net | $ | 201,323 | $ | 197,393 |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Payroll and benefits | $ | 35,362 | $ | 36,918 | |||
Income taxes payable | 1,258 | 11,322 | |||||
Acquisition payable (Note 3) | — | 8,485 | |||||
Other accrued expenses | 11,569 | 14,790 | |||||
Total accrued expenses | $ | 48,189 | $ | 71,515 |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Short-term credit facilities: | |||||||
Variable rate due February and June 2016 (1) | $ | 15,582 | $ | 7,848 | |||
Fixed rate at 0.50% due June 2016 (1) | 5,808 | 4,144 | |||||
Term loans: | |||||||
Long-term prime lending rate linked to short-term prime lending rate less 1.275%, due 2015 (2) | — | 690 | |||||
TIBOR plus 1.0%, due June 2016 (2) | 415 | 1,025 | |||||
TIBOR plus 1.0%, due November 2016 (2) | 2,385 | 6,112 | |||||
TIBOR plus 1.2%, due 2017 (3) | — | 17,265 | |||||
Fixed rate at 2.1%, due 2018 (4) | — | 43,508 | |||||
Fixed rate at 0.53%, due April 2018 (5) | 31,465 | — | |||||
55,655 | 80,592 | ||||||
Less: Short-term borrowings and current portion of long-term debt | (36,770 | ) | (35,652 | ) | |||
Long-term debt | $ | 18,885 | $ | 44,940 |
(1) | We have ¥2.9 billion ($24.3 million) of short-term credit facilities which mature annually and semi-annually. The facilities have been renewed at each maturity. Principal is payable in monthly installments. |
(2) | In 2011, we entered into ¥7.0 billion ($58.1 million) of term loan agreements which are collateralized by the land, building and certain machineries and equipment located at our facilities in Japan, namely Kitsuki, Usuki, Taketa, Kumamoto, Fukui and Hakodate. Principal is payable in monthly installments. |
(3) | In 2012, we entered into a ¥4.3 billion ($35.7 million) syndicated term loan agreement which is collateralized by the land, factories and equipment located at our facilities and a certain portion of accounts receivable. Principal is payable in quarterly installments. The outstanding balance was repaid in full in March 2015. |
(4) | In 2013, we entered into a ¥7.0 billion ($61.4 million) term loan agreement with Renesas in accordance with the Stock Transfer Agreement which is collateralized by substantially all the land, factories and equipment located at our facilities at J-Semi. Principal is payable in quarterly installments. The outstanding balance was repaid in full in April 2015. |
(5) | In 2015, we entered into ¥4.6 billion ($37.8 million) of term loan agreements. The proceeds were used to repay the term loan with Renesas. |
Interest Rates at December 31, | |||||
2015 | 2014 | ||||
Short-term credit facilities: | |||||
Variable rate | 0.46 | % | 0.53 | % | |
Fixed rate | 0.50 | % | 0.53 | % | |
Term loan: | |||||
Long-term prime lending rate linked to short-term prime lending rate less 1.275%, due 2015 | — | % | 1.20 | % | |
TIBOR plus 1.0%, due June 2016 | 1.13 | % | 1.13 | % | |
TIBOR plus 1.0%, due November 2016 | 1.13 | % | 1.13 | % | |
TIBOR plus 1.2%, due 2017 | — | % | 1.33 | % | |
Fixed rate at 2.1%, due 2018 | — | % | 2.10 | % | |
Fixed rate at 0.53%, due April 2018 | 0.53 | % | — | % |
Total Debt | |||
(In thousands) | |||
Payments due for the year ending December 31, | |||
2016 | $ | 36,770 | |
2017 | 12,579 | ||
2018 | 6,306 | ||
2019 | — | ||
2020 | — | ||
Thereafter | — | ||
Total debt | $ | 55,655 |
For the Year Ended December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation at beginning of year | $ | 37,607 | $ | 17,189 | |||
Service cost | 9,406 | 9,032 | |||||
Interest cost | 264 | 340 | |||||
Benefits paid | (937 | ) | (652 | ) | |||
Actuarial losses (gains) | (212 | ) | 2,312 | ||||
Acquisition (Note 3) | — | 14,676 | |||||
Effects of curtailment | 1,253 | — | |||||
Settlement | (15,544 | ) | — | ||||
Foreign exchange gain | 22 | (5,290 | ) | ||||
Projected benefit obligation at end of year | 31,859 | 37,607 | |||||
Change in plan assets: | |||||||
Fair value of plan assets at beginning of year | 11,211 | 9,405 | |||||
Actual gain on plan assets | 202 | 978 | |||||
Employer contributions | 18,973 | 3,100 | |||||
Settlement | (15,544 | ) | — | ||||
Benefits paid | (937 | ) | (653 | ) | |||
Foreign exchange loss | 30 | (1,619 | ) | ||||
Fair value of plan assets at end of year | 13,935 | 11,211 | |||||
Funded status of the Plans at end of year | $ | (17,924 | ) | $ | (26,396 | ) |
Prior Service Cost | Actuarial Net (Loss) Gain | Total | |||||||||
(In thousands) | |||||||||||
Balance at December 31, 2013, net of tax (unaudited) | $ | (352 | ) | $ | 1,480 | $ | 1,128 | ||||
Amortization included in net periodic pension cost | 25 | — | 25 | ||||||||
Net gain arising during period | — | (937 | ) | (937 | ) | ||||||
Adjustments to unrealized components of defined benefit pension plan included in other comprehensive income | 25 | (937 | ) | (912 | ) | ||||||
Balance at December 31, 2014, net of tax | $ | (327 | ) | $ | 543 | $ | 216 | ||||
Amortization included in net periodic pension cost | (7 | ) | — | (7 | ) | ||||||
Net gain arising during period | — | 489 | 489 | ||||||||
Adjustments to unrealized components of defined benefit pension plan included in other comprehensive income | (7 | ) | 489 | 482 | |||||||
Balance at December 31, 2015, net of tax | $ | (334 | ) | $ | 1,032 | $ | 698 | ||||
Estimated amortization to be included in 2016 net periodic pension cost | $ | (48 | ) | $ | — | $ | (48 | ) |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Plans with underfunded or non-funded projected benefit obligation: | |||||||
Aggregate projected benefit obligation | $ | 31,859 | $ | 37,607 | |||
Aggregate fair value of plan assets | 13,935 | 11,211 | |||||
Plans with underfunded or non-funded accumulated benefit obligation: | |||||||
Aggregate accumulated benefit obligation | 30,107 | 35,455 | |||||
Aggregate fair value of plan assets | 13,935 | 11,211 |
For the Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(unaudited) | |||||||||||
(In thousands) | |||||||||||
Components of net periodic pension cost and total pension expense: | |||||||||||
Service cost | $ | 9,406 | $ | 9,032 | $ | 7,765 | |||||
Interest cost | 264 | 340 | 151 | ||||||||
Expected return on plan assets | (188 | ) | (106 | ) | (151 | ) | |||||
Amortization of prior service cost | (48 | ) | (39 | ) | (43 | ) | |||||
Recognized actuarial loss | — | — | 53 | ||||||||
Net periodic pension cost | 9,434 | 9,227 | 7,775 | ||||||||
Curtailment (gain) loss | 1,253 | — | — | ||||||||
Settlement (gain) loss | 506 | — | — | ||||||||
Total pension expense | $ | 11,193 | $ | 9,227 | $ | 7,775 |
For the Year Ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
(unaudited) | ||||||||
Discount rate for determining net periodic pension cost | 1.0 | % | 1.5 | % | 1.5 | % | ||
Discount rate for determining benefit obligations at year end | 1.0 | % | 1.0 | % | 1.5 | % | ||
Rate of compensation increase for determining benefit obligations at year end | 2.0 | % | 0.6 | % | — | % | ||
Expected rate of return on plan assets for determining net periodic pension cost | 1.5 | % | 1.5 | % | 1.0 | % |
December 31, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Cash and cash equivalents (Level 1) | $ | 631 | $ | 690 | |||
Equity securities | |||||||
Domestic securities (Level 1) | 2,691 | 2,188 | |||||
Foreign securities (Level 1) | 2,519 | 2,231 | |||||
5,210 | 4,419 | ||||||
Bonds | |||||||
Domestic government and corporate bonds (Level 2) | 6,918 | 5,014 | |||||
Foreign government and corporate bonds (Level 2) | 1,173 | 1,001 | |||||
8,091 | 6,015 | ||||||
Other (Level 3) | 3 | 87 | |||||
Total | $ | 13,935 | $ | 11,211 |
Payments | |||
(In thousands) | |||
2016 | $ | 886 | |
2017 | 1,228 | ||
2018 | 1,778 | ||
2019 | 2,317 | ||
2020 | 2,965 | ||
2021 to 2025 | 25,187 |
Defined Benefit Pension | Foreign Currency Translation | Total | |||||||||
(In thousands) | |||||||||||
Accumulated other comprehensive income (loss) at December 31, 2013 (unaudited) | $ | 1,128 | $ | (26,576 | ) | $ | (25,448 | ) | |||
Other comprehensive loss before reclassifications | (937 | ) | (30,569 | ) | (31,506 | ) | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 25 | — | 25 | ||||||||
Other comprehensive loss | (912 | ) | (30,569 | ) | (31,481 | ) | |||||
Accumulated other comprehensive income (loss) at December 31, 2014 | $ | 216 | $ | (57,145 | ) | $ | (56,929 | ) | |||
Other comprehensive income (loss) before reclassifications | 489 | (74 | ) | 415 | |||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (7 | ) | — | (7 | ) | ||||||
Other comprehensive income (loss) | 482 | (74 | ) | 408 | |||||||
Accumulated other comprehensive income (loss) at December 31, 2015 | $ | 698 | $ | (57,219 | ) | $ | (56,521 | ) |
December 31, 2015 | December 31, 2014 | ||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||
(In thousands) | |||||||||||||||
Short-term credit facilities | $ | 21,391 | $ | 21,390 | $ | 11,994 | $ | 11,992 | |||||||
Term loans | 34,194 | 34,265 | 69,485 | 68,600 | |||||||||||
Total debt | $ | 55,585 | $ | 55,655 | $ | 81,479 | $ | 80,592 |
Lease Payments | |||
(In thousands) | |||
2016 | $ | 8,989 | |
2017 | 5,503 | ||
2018 | 2,115 | ||
2019 | 1,386 | ||
2020 | 790 | ||
Thereafter | 277 | ||
Total | $ | 19,060 |
(In thousands) | |||
2016 | $ | 1,736 | |
2017 | 1,858 | ||
2018 | 476 | ||
2019 | 316 | ||
2020 | 139 | ||
Thereafter | 63 | ||
Total minimum lease payments | 4,588 | ||
Less: amount of interest contained in above payments | (131 | ) | |
Capital lease obligation | $ | 4,457 |
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Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Jan. 29, 2016 |
Jun. 30, 2015 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | AMKOR TECHNOLOGY, INC. | ||
Entity Central Index Key | 0001047127 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 237,388,425 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 591.6 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Net income | $ 59,607 | $ 133,887 | $ 111,657 |
Other comprehensive income (loss), net of tax: | |||
Adjustments to unrealized components of defined benefit pension plans, net of tax | 1,100 | (1,512) | 4,360 |
Foreign currency translation adjustment | (146) | (11,964) | (4,895) |
Equity interest in J-Devices' other comprehensive income (loss), net of tax | 29,829 | (19,136) | (10,961) |
Total other comprehensive income (loss) | 30,783 | (32,612) | (11,496) |
Comprehensive income | 90,390 | 101,275 | 100,161 |
Comprehensive income attributable to noncontrolling interests | 2,795 | 3,501 | 2,361 |
Comprehensive income attributable to Amkor | $ 87,595 | $ 97,774 | $ 97,800 |
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Amkor stockholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 282,724 | 282,231 |
Common stock, shares outstanding (in shares) | 237,005 | 236,627 |
Preferred stock designated Series A, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock designated Series A, shares authorized (in shares) | 10,000 | 10,000 |
Preferred stock designated Series A, shares issued (in shares) | 0 | 0 |
Treasury stock, shares | 45,719 | 45,604 |
Description of Business and Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business and Summary of Significant Accounting Policies |
Description of Business Amkor is one of the world’s leading providers of outsourced semiconductor packaging and test services. Amkor pioneered the outsourcing of semiconductor packaging and test services through a predecessor corporation in 1968, and over the years we have built a leading position by:
Basis of Presentation Our Consolidated Financial Statements include the accounts of Amkor Technology, Inc. and our subsidiaries (“Amkor”). Our Consolidated Financial Statements reflect the elimination of all significant inter-company accounts and transactions. On July 31, 2013, we completed the purchase of Amkor Technology Malaysia Sdn. Bhd. The financial results of the entity have been included in our Consolidated Financial Statements from the date of acquisition (Note 3). On June 30, 2014, we completed the sale of our Japanese subsidiary to J-Devices. The financial results of the divested entity were included in our Consolidated Financial Statements up to the date of sale and have subsequently been included in the results of J-Devices. On December 30, 2015, we increased our investment in J-Devices to 100% through the exercise of options. As a result, our accounting for J-Devices changed from the equity method to the consolidation method effective December 30, 2015. Our investments in variable interest entities in which we are the primary beneficiary are consolidated. We reflect the remaining portion of variable interest entities and foreign subsidiaries that are not wholly owned as noncontrolling interests. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to acquisitions, revenue recognition, income taxes, inventory, long lived assets and contingencies. These estimates are based on management’s best knowledge of current events, historical experience, actions that we may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results could differ materially from these estimates and assumptions. Consolidation of Variable Interest Entities We have variable interests in certain Philippine realty corporations in which we have a 40% ownership and from whom we lease land and buildings in the Philippines, for which we are the primary beneficiary. As of December 31, 2015, the combined book value of the assets and liabilities associated with these Philippine realty corporations included in our Consolidated Balance Sheet was $16.9 million and $0.2 million, respectively. The impact of consolidating these variable interest entities on our Consolidated Statements of Income was not significant, and other than our lease payments, we have not provided any significant assistance or other financial support to these variable interest entities for the years ended December 31, 2015, 2014 or 2013. The creditors of the Philippine realty corporations have no recourse to our general credit. Foreign Currency Translation The U.S. dollar is the functional currency of our subsidiaries, with the exception of J-Devices, and the foreign currency asset and liability amounts at these subsidiaries are remeasured into U.S. dollars at end-of-period exchange rates, except for nonmonetary items which are remeasured at historical rates. Foreign currency income and expenses are remeasured at daily exchange rates, except for expenses related to balance sheet amounts which are remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in other (income) expense, net in the period in which they occur. The Japanese Yen is the functional currency of J-Devices. The asset and liability amounts of J-Devices are translated into U.S. dollars at end-of-period exchange rates. Income and expenses are translated into U.S. dollars at average exchange rates in effect during the period. The resulting translation adjustments are reported as a component of accumulated other comprehensive income in the stockholders’ equity section of the balance sheet. Assets and liabilities denominated in a currency other than the functional currency are remeasured into the functional currency prior to translation into U.S. dollars, and the resulting transaction exchange gains or losses are included in other expense (income) in the period in which they occur. Risks and Concentrations The semiconductor industry is characterized by rapid technological change, competitive pricing pressures and cyclical market patterns. Our financial results are affected by a wide variety of factors, including general economic conditions worldwide, economic conditions specific to the semiconductor industry, the timely implementation of new package and test technologies, the ability to safeguard patents and intellectual property in a rapidly evolving market and reliance on materials and equipment suppliers. In addition, the semiconductor market has historically been cyclical and subject to significant economic downturns at various times. Our profitability and ability to generate cash from operations is principally dependent upon demand for semiconductors, the utilization of our capacity, semiconductor package mix, the average selling price of our services, our ability to manage our capital expenditures and our ability to control our costs including labor, material, overhead and financing costs. A significant portion of our revenues is concentrated with a small group of customers (Note 18). The loss of a significant customer, a business combination among customers, a reduction in orders or decrease in price from a significant customer or disruption in any of our significant strategic partnerships or other commercial arrangements could have a material adverse effect on our business, liquidity, results of operations, financial condition and cash flows. Financial instruments, for which we are subject to credit risk, consist principally of accounts receivable and cash and cash equivalents. With respect to accounts receivable, we mitigate our credit risk by selling primarily to well-established companies, performing ongoing credit evaluations and making frequent contact with customers. In addition, we may utilize non-recourse factoring to mitigate credit risk when considered appropriate. We have historically mitigated our credit risk with respect to cash and cash equivalents through diversification of our holdings into various high quality money market funds and bank deposit accounts. At December 31, 2015, our cash and cash equivalents were invested in U.S. money market funds and various U.S. and foreign bank operating and time deposit accounts. Contingencies and Litigation We may be subject to certain legal proceedings, lawsuits and other claims, as discussed in Note 17. We accrue for a loss contingency, including legal proceedings, lawsuits, pending claims and other legal matters, when we conclude that the likelihood of a loss is probable and the amount of the loss can be reasonably estimated. When the reasonable estimate of the loss is within a range of amounts, and no amount in the range constitutes a better estimate than any other amount, we accrue for the amount at the low end of the range. We adjust our accruals from time to time as we receive additional information, but the loss we incur may be significantly greater than or less than the amount we have accrued. We disclose loss contingencies if we believe they are material and there is at least a reasonable possibility that a loss has been incurred. Attorney fees related to legal matters are expensed as incurred. Cash and Cash Equivalents We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Our cash and cash equivalents consist of amounts invested in U.S. money market funds and various U.S. and foreign bank operating and time deposit accounts. Restricted Cash Restricted cash, current, consists of short-term cash equivalents used to collateralize our daily banking services. Restricted cash, non-current, mainly consists of collateral to fulfill foreign trade compliance requirements. Inventories Inventories are stated at the lower of cost or market (net realizable value). Cost is principally determined by standard cost (on a first-in, first-out basis, with the exception of work-in-process which is determined on an average cost basis), all of which approximate actual cost. We review and set our standard costs as needed, but at a minimum on an annual basis. We reduce the carrying value of our inventories for the cost of inventory we estimate is excess and obsolete based on the age of our inventories. When a determination is made that the inventory will not be utilized in production or is not saleable, it is written-off. Other Current Assets Other current assets consist principally of prepaid assets, deferred tax assets and an investment in government securities by a foreign subsidiary to satisfy local regulatory requirements, which is recorded at amortized cost. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is calculated by the straight-line method over the estimated useful lives of depreciable assets which are as follows:
Cost and accumulated depreciation for property retired or disposed of are removed from the accounts, and any resulting gain or loss is included in earnings. Expenditures for maintenance and repairs are charged to expense as incurred. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of a long-lived asset group to be held and used in operations is measured by a comparison of the carrying amount to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If such asset group is considered to be impaired, the impairment loss is measured as the amount by which the carrying amount of the asset group exceeds its fair value. Long-lived assets to be disposed of are carried at the lower of cost or fair value less the costs of disposal. Goodwill Goodwill is recorded when the cost of an acquisition exceeds the fair value of the net tangible and identifiable intangible assets acquired. We review goodwill for impairment annually during the fourth quarter of each year and whenever events or changes in circumstances indicate that an impairment exists. Impairment losses are recorded when the carrying amount of goodwill exceeds its implied fair value. No goodwill impairment has been identified in any of the years presented. Investments Our investment in J-Devices, a previously unconsolidated joint venture to provide semiconductor packaging and test services in Japan, was accounted for as an equity method investment before our ownership reached 100% on December 30, 2015. We evaluated our investment for other-than-temporary impairment whenever events or changes in circumstances indicated that the fair value of the investment may have been less than its carrying value. See Note 3 for additional information. Other Assets Other assets consist principally of deferred tax assets, refundable security deposits and deferred debt issuance costs. Other Non-current Liabilities Other non-current liabilities consist primarily of liabilities associated with the settlement of patent license litigation and uncertain income tax positions. See Note 17 for additional information on the settlement. Fair Value Measurements We apply fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. See Note 16 for further discussion of fair value measurements. Revenue Recognition We recognize revenue from our packaging and test services, net of value-added or other similar taxes, when there is evidence of an arrangement, delivery has occurred or services have been rendered, fees are fixed or determinable and collectibility is reasonably assured. Generally these criteria are met and revenue is recognized upon shipment or, in some cases, customer acceptance. If the revenue recognition criteria are not met, we defer the revenue. Deferred revenue generally results from two types of transactions: contractual invoicing at interim points in the packaging and test process prior to shipment of the finished product and customer advances for supply agreements with customers where we commit capacity in exchange for customer prepayment of services. These prepayments are deferred and recorded as customer advances within accrued expenses and other non-current liabilities. We generally do not take ownership of customer-supplied semiconductor wafers. Title and risk of loss remains with the customer for these materials at all times. Accordingly, the cost of the customer-supplied materials is not included in our Consolidated Financial Statements. An allowance for sales credits is recorded as a reduction to sales and accounts receivable during the period of sale such that accounts receivable is reported at its estimated net realizable value. The allowance for sales credits is an estimate of the future credits we will issue for billing adjustments primarily for invoicing corrections and miscellaneous customer claims and is estimated based upon recent credit issuance, historical experience and specific identification of known or expected sales credits at the end of the reporting period. Additionally, provisions are made for doubtful accounts when there is doubt as to the collectibility of accounts receivable. The allowance for doubtful accounts is recorded as bad debt expense and is classified as selling, general and administrative expense. The allowance for doubtful accounts is based upon specific identification of doubtful accounts considering the age of the receivable balance, the customer’s historical payment history and current credit worthiness as well as specific identification of any known or expected collectibility issues. Historically, our allowance for doubtful accounts has been immaterial. Shipping and Handling Fees and Costs Amounts billed to customers for shipping and handling are presented in net sales. Costs incurred for shipping and handling are included in cost of sales. Research and Development Costs Research and development expenses include costs attributable to the conduct of research and development programs primarily related to the development of new package designs or technologies and improving the efficiency and capabilities of our existing production processes. Such costs include salaries, payroll taxes, employee benefit costs, materials, supplies, depreciation and maintenance of research equipment, services provided by outside contractors and the allocable portions of facility costs such as rent, utilities, insurance, repairs and maintenance, depreciation and general support services. All costs associated with research and development are expensed as incurred. Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis as well as for net operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for those deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. We monitor on an ongoing basis our ability to utilize our deferred tax assets and whether there is a need for a related valuation allowance. In evaluating our ability to recover our deferred tax assets in the jurisdictions from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and results of recent operations. For most of our foreign deferred tax assets, we consider it more likely than not that we will have sufficient taxable income to allow us to realize these deferred tax assets. However, in the event taxable income falls short of current expectations, we may need to establish a valuation allowance against such deferred tax assets. We recognize in our Consolidated Financial Statements the impact of an income tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Related interest and penalties are classified as income taxes in the financial statements. See Note 6 for more information regarding unrecognized income tax benefits. |
New Accounting Standards |
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New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||
New Accounting Standards |
Recently Adopted Standards In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-17, Income Taxes (Topic 840) - Balance Sheet Classification of Deferred Taxes. ASU 2015-17 requires that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for reporting periods beginning after December 15, 2016 and can be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. Early adoption is permitted. We adopted ASU 2015-17 on December 31, 2015. The guidance was applied prospectively and our deferred tax assets and liabilities were presented as noncurrent in our consolidated balance sheet as of December 31, 2015. Recently Issued Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and changes in judgments. ASU 2014-09 permits the use of either full retrospective or modified retrospective methods of adoption. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date by one year to December 15, 2017, for interim and annual reporting periods beginning after that date. Early adoption is permitted, but not before the original effective date of December 15, 2016. We are currently evaluating the method of adoption and the impact that this guidance will have on our financial statements and disclosure. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update), which clarifies that companies may continue to present unamortized debt issuance costs associated with line of credit arrangements as an asset. ASU 2015-03 and ASU 2015-15 are effective for interim and annual reporting periods beginning after December 15, 2015, and require retrospective application. Early adoption is permitted. The adoption of this standard will result in the reclassification of certain debt issuance costs from other assets to a reduction in the carrying amount of the related debt liability within the balance sheet. In July 2015, the FASB issued ASU 2015-11, Inventory - Simplifying the Measurement of Inventory (Topic 330). ASU 2015-11 requires inventory to be subsequently measured using the lower of cost and net realizable value, thereby eliminating the market value approach. Net realizable value is defined as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.” ASU 2015-11 is effective for reporting periods beginning after December 15, 2016 and is applied prospectively. Early adoption is permitted. ASU 2015-11 is not expected to have a significant impact on our financial statements or disclosure. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805) - Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are identified, including the cumulative effect of the change in provisional amount as if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for reporting periods beginning after December 15, 2015 and is applied prospectively. Early adoption is permitted. ASU 2015-16 may affect our financial statements to the extent we have business combinations or measurement period adjustments in the future. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for reporting periods beginning after December 15, 2017. Early adoption is not permitted. We are currently evaluating the impact that this guidance will have on our financial statements and disclosure. |
Acquisitions and Divestiture |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Divestiture |
Step-acquisition of J-Devices In October 2009, Amkor and Toshiba invested in Nakaya Microdevices Corporation (“NMD”) and formed a joint venture to provide semiconductor packaging and test services in Japan. As a result of the transaction, NMD changed its name to J-Devices Corporation. We invested $16.7 million for our original 30% equity interest and options to acquire additional equity interests. We exercised our options and increased our ownership interest in J-Devices from 30% to 60% in April 2013, for an aggregate purchase price of $67.4 million, and from 60% to 65.7% in January 2015, for an aggregate purchase price of $12.9 million. Through the exercise of additional options, on December 30, 2015, we increased our ownership interest in J-Devices from 65.7% to 100% for a purchase price of $105.4 million. The acquisition of the remaining interest expands our presence in Japan and our business worldwide by capitalizing on our leadership position in the automotive market. The governance provisions applicable to J-Devices before our ownership reached 80% restricted our ability, even with our majority ownership, to cause J-Devices to take certain actions without the consent of the other investors. Accordingly, prior to December 30, 2015, we accounted for our investment in J-Devices using the equity method of accounting. Under the equity method of accounting, we recognized our proportionate share of J-Devices’ net income or loss, which is after J-Devices' income taxes in Japan, during each accounting period as a change in our investment in unconsolidated affiliate. In addition, we recorded equity method adjustments as a change in our investment. The equity method adjustments included the amortization of basis differences between the cost of our investment and our proportionate share of J-Devices' equity. These basis differences were the result of us acquiring interests in J-Devices' equity at a discount or a premium to book value, as the case may be. Upon the increase in our ownership interest to 100% on December 30, 2015, the governance restrictions lapsed, we obtained control of J-Devices and changed our accounting for J-Devices to the consolidation method effective December 30, 2015. Since there were no material transactions from December 30, 2015 to December 31, 2015, and for the convenience of reporting the acquisition for accounting purposes, December 31, 2015 was designated as the acquisition date. The following table summarizes the consideration transferred to acquire J-Devices and the amounts of identifiable assets acquired and liabilities assumed at the acquisition date:
The goodwill is attributable to the workforce of J-Devices, as well as cost savings and synergies expected from combining the operations of J-Devices. It is not deductible for tax purposes. As a result of obtaining control over J-Devices, our previously held equity interest of 65.7% was remeasured to fair value, resulting in a gain of $16.1 million. Additionally, our previously held equity interest in J-Devices' accumulated foreign currency translation adjustments was released upon consolidation of J-Devices, resulting in a loss of $30.0 million (Note 15). The combined net loss of $13.9 million was recognized in other (income) expense, net (Note 5) in our Consolidated Financial Statements. The fair value of our previously held equity interest in J-Devices was estimated by applying an income approach using the discounted cash flow method. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 fair value measurements. Key assumptions include our estimates of J-Devices’ financial projections, a terminal value based on its expected long-term growth rate and a discount rate based on the weighted average cost of capital of comparable companies. The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of J-Devices had occurred on January 1, 2014. The pro forma results include adjustments related to alignment to our accounting policies, the effect of fair value adjustments on property, plant and equipment and the related income tax effect. We also eliminated inter-company activity between the parties in the consolidated results. The pro forma results include the activities that are non-recurring and not representative of future activities, including the gain of $16.2 million from reversal of a deferred tax asset valuation allowance and the gain of $12.6 million from release of accumulated foreign currency translation adjustments associated with merging our subsidiary into J-Devices in 2014, offset by the loss on acquisition of J-Devices of $13.9 million in 2014. This pro forma data is presented for informational purposes only and does not purport to be indicative of the results of future operations or of the results that would have occurred had the 2015 acquisition taken place on January 1, 2014. The pro forma information does not include any potential revenue enhancements, cost synergies or other operating efficiencies that could result from the acquisition.
Sale of Subsidiary to J-Devices On June 30, 2014, we sold 100% of the shares of our wholly-owned subsidiary engaged in semiconductor packaging and test operations in Japan to J-Devices (our previously held equity method investee) for ¥1.1 billion. We received ¥0.1 billion ($1.0 million) in cash from J-Devices at closing and received the remaining ¥1.0 billion ($8.4 million) on June 30, 2015. We recognized a net gain on the sale of $9.2 million in our Consolidated Financial Statements in other (income) expense, net, which includes a gain of $12.6 million from the release of accumulated foreign currency translation adjustments associated with the entity (Note 15). J-Devices recognized a gain of $14.7 million on the transaction in its Consolidated Financial Statements as the fair value of the net assets acquired exceeded the purchase price. The gain recognized by J-Devices increased our equity in earnings of J-Devices by $8.8 million. The combined net gain we recognized was $18.0 million. Acquisition of Amkor Technology Malaysia Sdn. Bhd. On July 31, 2013, we completed the purchase of 100% of the shares of Toshiba Electronics Malaysia Sdn. Bhd., Toshiba’s power discrete semiconductor packaging and test operation in Malaysia, and subsequently changed the name of the entity to Amkor Technology Malaysia Sdn. Bhd. The total price for the shares was $61.2 million, based on the net asset value at closing. We paid $42.4 million in cash at closing and paid the remaining $18.8 million in March 2014. We were also granted a non-exclusive, royalty bearing license by Toshiba to certain intellectual property rights for providing packaging and test services for power discrete and certain other semiconductor products. The license has a royalty cap of ¥1.5 billion (approximately $12 million). Under the purchase method of accounting, we allocated the purchase price to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. We did not record any goodwill as a result of the acquisition. |
Share-Based Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Plans |
Our share-based compensation is measured at fair value and expensed over the service period (generally the vesting period). The amount of compensation expense to be recognized is adjusted for an estimated forfeiture rate which is based on historical data. For the years ended December 31, 2015, 2014 and 2013, we recognized share-based compensation attributable to stock options and restricted shares of $3.9 million, $3.7 million and $3.0 million, respectively, primarily in selling, general and administrative expenses. There were no corresponding deferred income tax benefits for stock options or restricted shares. Equity Incentive Plan Amended and Restated 2007 Equity Incentive Plan. The Amended and Restated 2007 Equity Incentive Plan, (the “2007 Plan”) provides for the grant of the following types of incentive awards: (i) stock options, (ii) restricted stock, (iii) restricted stock units, (iv) stock appreciation rights, (v) performance units and performance shares and (vi) other stock or cash awards. Those eligible for awards include employees, directors and consultants who provide services to Amkor and its subsidiaries. The 2007 Plan has a contractual life of ten years and can be terminated at the discretion of the Board of Directors. There were originally 17.0 million shares of our common stock reserved for issuance under the 2007 Plan and at December 31, 2015 there were 11.5 million shares available for grant. Stock options Stock options are generally granted with an exercise price equal to the market price of the stock at the date of grant. Substantially all of the options granted are exercisable pursuant to a one to four year vesting schedule and the term of the options granted is no longer than ten years. Upon option exercise, we may issue new shares of common or treasury stock. In order to calculate the fair value of stock options at the date of grant, we use the Black-Scholes option pricing model. Expected volatilities are based on historical performance of our stock. We also use historical data to estimate the timing and amount of option exercises and forfeitures within the valuation model. The expected term of the options is based on evaluations of historical and expected future employee exercise behavior and represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following table summarizes our stock option activity for the year ended December 31, 2015:
The following assumptions were used to calculate the weighted average fair values of the options granted:
Total unrecognized compensation expense from stock options, net of a forfeiture estimate, was $2.8 million as of December 31, 2015, which is expected to be recognized over a weighted-average period of approximately 1.9 years beginning January 1, 2016. Restricted Shares We grant restricted shares to directors and employees under the 2007 Plan. Restricted shares granted to directors vest on the earlier of the one year anniversary of the grant date or the date of the next annual meeting of stockholders. All other restricted shares vest ratably over four years, with 25% of the shares vesting at the end of the first year and the remainder vesting quarterly thereafter such that 100% of the shares will become vested on the fourth anniversary of the award, subject to the recipient’s continued employment with us on the applicable vesting dates. In addition, provided that the restricted shares have not been forfeited earlier, for certain grants, the restricted shares will vest upon the recipient’s death or disability, or upon a change in control of Amkor. The value of the restricted shares is determined based on the fair market value of the underlying shares on the date of the grant and is recognized ratably over the vesting period. Upon vesting of restricted stock awards, we may issue new shares of common or treasury stock. The following table summarizes our restricted share activity for the year ended December 31, 2015:
Total unrecognized compensation cost from restricted shares, net of a forfeiture estimate, was $1.4 million as of December 31, 2015, which is expected to be recognized over a weighted average period of approximately 1.2 years beginning January 1, 2016. |
Other Income and Expense |
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Other Income and Other Expense Disclosure [Text Block] |
Other income and expense consists of the following:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
Geographic sources of income (loss) before income taxes are as follows:
The provision for income taxes includes current federal, state and foreign taxes payable and those deferred because of temporary differences between the financial statement and the tax bases of assets and liabilities. The components of the provision (benefit) for income taxes are as follows:
The reconciliation between the U.S. federal statutory income tax rate of 35% and our income tax provision is as follows:
In 2015, we recognized a loss in connection with our increased ownership interest in J-Devices which is not deductible for income taxes. The 2014 change in foreign income taxed at different rates was due to a change in the geographic income mix which resulted in a lower tax benefit. During 2013, we incurred costs which are not deductible for income tax purposes including certain costs in connection with the exchange of the 2014 Notes for shares of our common stock. In 2015, the valuation allowance on our deferred tax assets increased by $18.3 million primarily as a result of the generation of U.S. net operating loss carryforwards. In 2014, the valuation allowance on our deferred tax assets decreased by $29.3 million primarily as a result of the utilization of U.S. net operating loss carryforwards and the reduction of valuation allowance as the result of the sale of a subsidiary. In 2013, the valuation allowance on our deferred tax assets decreased by $30.6 million primarily as a result of the utilization of U.S. net operating loss carryforwards and expiring capital losses. Also during 2013, we concluded that sufficient net positive evidence existed to release the valuation allowance against the deferred tax assets at one of our foreign jurisdictions. The following is a summary of the components of our deferred tax assets and liabilities:
As a result of certain income tax accounting realization requirements with respect to accounting for share-based compensation, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets at December 31, 2015 and 2014 that arose directly from tax deductions related to equity compensation that is greater than the compensation recognized for financial reporting. At December 31, 2015, our deferred tax assets do not include $12.8 million of excess tax deductions from equity compensation that are part of net operating loss carryforwards, which, if such deferred tax assets are subsequently realized will be recorded to contributed capital. As a result of net operating loss carryforwards, we were not able to recognize the excess tax benefits of stock option deductions in 2015 because the deductions did not reduce income tax payable using a with-and-without approach for the utilization of tax attributes. As a result of certain capital investments, export commitments and employment levels, income from operations in Korea, Malaysia, the Philippines and Taiwan was subject to reduced income tax rates and in some cases was exempt from income taxes. The reduced tax rates or tax exemptions expire at various dates through 2024. We recognized $3.3 million, $0.9 million and $4.8 million in tax benefits as a result of the tax holidays in 2015, 2014 and 2013, respectively. The benefit of the tax holidays on diluted earnings per share was approximately $0.01, $0.00 and $0.02 for 2015, 2014 and 2013, respectively. Our net operating loss carryforwards (“NOL’s”) are as follows:
We monitor on an ongoing basis our ability to utilize our deferred tax assets and whether there is a need for a related valuation allowance. In evaluating our ability to recover our deferred tax assets in the jurisdictions from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and results of recent operations. For most of our foreign deferred tax assets, we consider it more likely than not that we will have sufficient taxable income to allow us to realize these deferred tax assets. As of December 31, 2015, our net deferred tax assets include $38.2 million from our operations in Korea, including the deferred tax asset associated with a $62.9 million net operating loss carryforward. At this time, we consider it more likely than not we will have sufficient taxable income in the future that will allow us to realize these deferred tax assets. However, it is possible that some or all of these net operating loss carryforwards could ultimately expire unused, in the event future taxable income falls short of our current expectations. If our assessment of the recoverability of Korean deferred tax assets changes in the future, we may need to establish a valuation allowance against such deferred tax assets. The deferred tax assets associated with our U.S. federal and state net operating losses available for carryforward have been fully reserved with valuation allowances at December 31, 2015 and 2014. Also, our ability to utilize our U.S. net operating loss carryforwards may be limited in the future if we experience an ownership change as defined by the Internal Revenue Code. At December 31, 2015, we have various tax credits available to be carried forward including U.S. foreign income tax credits totaling $8.1 million, expiring in 2016, and income tax credits totaling $13.0 million expiring in varying amounts through 2020 at our subsidiary in Korea. The deferred tax assets associated with the U.S. foreign income tax credits and certain foreign income tax credits have been fully reserved with a valuation allowance. Income tax credits generated by certain of our foreign subsidiaries in 2015, 2014 and 2013 have been recognized in our income tax provision. Income taxes have not been provided on approximately $754.2 million of the undistributed earnings of our foreign subsidiaries at December 31, 2015, over which we have sufficient influence to control the distribution of such earnings and have determined that substantially all such earnings have been reinvested indefinitely. These earnings could become subject to either or both U.S. federal income tax and foreign withholding tax if they are remitted as dividends, if foreign earnings are loaned to any of our domestic companies, or if we sell our investment in certain subsidiaries. We estimate that repatriation of these foreign earnings would generate additional foreign withholding taxes of approximately $21.6 million and insignificant U.S. federal income tax after foreign tax credits. We operate in and file income tax returns in various U.S. and foreign jurisdictions which are subject to examination by tax authorities. Current examinations include our 2012 and 2013 Philippines income tax returns and 2010-2014 Malaysian income tax returns. We have tax returns that are open to examination in various jurisdictions for tax years 2010-2015. The open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations related to the amount and/or timing of income, deductions and tax credits. A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
The net increase in our unrecognized tax benefits was $0.3 million from December 31, 2014 to December 31, 2015. Our unrecognized tax benefits increased primarily related to income attribution and income characterization. These increases were offset by reductions due to a change in filing position and the lapse of statues of limitations related to reserves associated with income attribution. At December 31, 2015, all of our gross unrecognized tax benefits would reduce our effective tax rate, if recognized. The liability related to our unrecognized tax benefits is $7.8 million as of December 31, 2015, and is reported as a component of other non-current liabilities. The unrecognized tax benefits presented in the table above include positions that have reduced deferred tax assets, which are not included in the liability reported as a component of other non-current liabilities. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense in our Consolidated Statement of Operations. During 2015, we accrued $0.2 million of interest and penalties related to various uncertain tax positions. The balance of accrued and unpaid interest and penalties is $0.6 million as of December 31, 2015 and is included as a component in other non-current liabilities in connection with our unrecognized tax benefits. It is reasonably possible that the total amount of unrecognized tax benefits related to income attribution will decrease by up to $0.1 million due to the lapse of statues of limitations in foreign jurisdictions. Our unrecognized tax benefits are subject to change as examinations of specific tax years are completed in the respective jurisdictions. Tax return examinations involve uncertainties and there can be no assurance that the outcome of examinations will be favorable. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share |
Basic earnings per share (“EPS”) is computed by dividing net income attributable to Amkor common stockholders by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding includes restricted shares held by retirement eligible recipients and is reduced for treasury stock. Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. Dilutive potential common shares include outstanding stock options, unvested restricted shares and convertible debt. The following table summarizes the computation of basic and diluted EPS:
The following table summarizes the potential shares of common stock that were excluded from diluted EPS, because the effect of including these potential shares was antidilutive:
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Factoring of Accounts Receivable |
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Factoring of Accounts Receivable [Abstract] | |||||
Factoring of Accounts Receivable [Table Text Block] |
In certain foreign locations, we use non-recourse factoring arrangements with third party financial institutions to manage our working capital and cash flows. Under this program, we sell receivables to a financial institution for cash at a discount to the face amount. As part of the factoring arrangements, we perform certain collection and administrative functions for the receivables sold. For the year ended December 31, 2015 and 2014, we sold accounts receivable totaling $323.5 million and $340.0 million, respectively, for a discount, plus fees, of $1.5 million in 2015 and 2014. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Inventories consist of the following:
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant And Equipment |
Property, plant and equipment consist of the following:
Depreciation expense was $492.5 million, $463.5 million and $406.7 million for 2015, 2014 and 2013, respectively. During 2013, we purchased land for a factory and research and development center in Korea for $104.1 million. In 2014, we commenced construction activities and incurred costs of $29.8 million, including capitalized interest of $8.6 million which is reflected in construction in progress. As of December 31, 2015, construction in progress reflects $312.1 million of costs, including capitalized interest of $18.7 million. |
Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Goodwill |
The following table presents the changes in the carrying amount of goodwill:
Goodwill acquired in the year relates to the increase in our ownership interest in J-Devices to 100% on December 30, 2015 (Note 3). |
Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses |
Accrued expenses consist of the following:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt |
Following is a summary of short-term borrowings and long-term debt:
Interest Rates Interest is payable semiannually on our senior notes and quarterly or monthly on our other variable and fixed rate debt. Refer to the table above for the interest rates on our fixed rate debt and to the table below for the interest rates on our variable rate debt.
Compliance with Debt Covenants The debt of Amkor Technology, Inc. is structurally subordinated in right of payment to all existing and future debt and other liabilities of our subsidiaries. The agreements governing our indebtedness contain a number of affirmative and negative covenants which restrict our ability to pay dividends and could restrict our operations. We have never paid a dividend to our stockholders and we do not have any present plans for doing so. We were in compliance with all of our covenants at December 31, 2015 and 2014. Maturities
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Pension and Severance Plans |
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Severance Plans | 14.Pension and Severance Plans Korean Severance Plan Our subsidiary in Korea maintains an unfunded severance plan that covers certain employees that were employed prior to August 1, 2015. To the extent eligible employees are terminated, our subsidiary in Korea would be required to make lump-sum severance payments on behalf of these eligible employees for service provided prior to August 1, 2015. Factors used to determine severance benefits include employees' length of service, seniority and rate of pay. The employees' length of service and seniority are fixed as of July 31, 2015. The employees' rate of pay is adjusted to the rate of pay at the time of termination. Accrued severance benefits are estimated assuming all eligible employees were to terminate their employment at the balance sheet date. Our contributions to the National Pension Plan of the Republic of Korea are deducted from accrued severance benefit liabilities. On August 1, 2015, our subsidiary in Korea began sponsoring a defined benefit pension plan and a defined contribution plan. For future service benefits, existing employees have the option of choosing either a defined benefit pension plan or a defined contribution plan and new employees will be enrolled in a defined contribution plan. The changes to the balance of our severance accrual are as follows:
Foreign Defined Benefit Pension Plans Our subsidiaries in Japan, Korea, Malaysia, the Philippines and Taiwan sponsor defined benefit plans (the “Plans”). Charges to expense are based upon actuarial analyses. The following table summarizes the Plans’ benefit obligations, fair value of the Plans’ assets and the funded status of the Plans at December 31, 2015 and 2014.
The accrued benefit liability, included in pension and severance obligations in the Consolidated Balance Sheets, as of December 31, 2015 and 2014 was $33.7 million and $19.2 million, respectively. The accumulated benefit obligation as of December 31, 2015 and 2014 was $77.6 million and $44.1 million, respectively. The following table summarizes, by component, the change in accumulated other comprehensive income related to our Plans:
Information for pension plans with benefit obligations in excess of plan assets are as follows:
The following table summarizes net periodic pension costs:
As a result of the adoption of a defined benefit pension plan in Korea beginning on August 1, 2015, our net periodic pension cost has increased from the prior period. The following table summarizes the weighted-average assumptions used in computing the net periodic pension cost and projected benefit obligation at December 31, 2015, 2014 and 2013:
The measurement date for determining the Plans’ assets and benefit obligations is December 31, each year. Discount rates are generally derived from yield curves constructed from high-quality corporate or foreign government bonds, for which the timing and amount of cash outflows approximate the estimated payouts. The expected rate of return assumption is based on weighted-average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets and include input from our actuaries. We have no control over the direction of our investments in our defined benefit plans in Taiwan as the local Labor Standards Law Fund mandates such contributions into a cash account balance at the Bank of Taiwan. One of our defined benefit pension plans in Japan and our defined benefit pension plan in Malaysia are non-funded plans, and as such, no assets exist related to these plans. Our investment strategies for our other defined benefit plan in Japan and our defined benefit plans in Korea and the Philippines, are based on long-term, sustained asset growth through low to medium risk investments. The current rate of return assumption targets are based on asset allocation strategies as follows:
Philippine plan assets included Amkor common stock totaling $0.6 million and $0.7 million at December 31, 2015, and December 31, 2014, respectively. The fair value of our pension plan assets, by asset category utilizing the fair value hierarchy as discussed in Note 16, is as follows:
The Taiwan retirement fund category of our plan assets represents accounts that our subsidiaries in Taiwan have in a government labor retirement fund in the custody of the Bank of Taiwan. The accounts earn a minimum guaranteed rate of return and are invested in a mix of cash, domestic and foreign equity securities and domestic and foreign debt securities. We expect to make contributions of $24.1 million during 2016. We closely monitor the funded status of the Plans with respect to legislative requirements. We intend to make at least the minimum contribution required by law each year. The estimated future benefit payments related to our foreign defined benefit plans are as follows:
Defined Contribution Plans We sponsor defined contribution plans in Korea, Malaysia, Taiwan and the U.S. Total defined contribution expense was $8.6 million, $6.8 million and $5.2 million for 2015, 2014 and 2013, respectively. |
Accumulated Other Comprehensive Income and Loss Accumulated Other Comprehensive Income and Loss |
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Comprehensive Income (Loss) Note [Text Block] |
The following table reflects the changes in accumulated other comprehensive income (loss), net of tax:
Amounts reclassified out of accumulated other comprehensive income (loss) are included as a component of net periodic pension cost (Note 14) or other (income) expense, net. In 2014, the amount reclassified out of accumulated other comprehensive income (loss) and included in other (income) expense, net was a result of the release of accumulated foreign currency translation adjustments associated with the sale of our subsidiary in Japan (Note 3). In 2015, the amount reclassified out of accumulated other comprehensive income (loss) and included in other (income) expense, net was due to the release of our previously held equity interest in J-Devices' accumulated foreign currency translation upon consolidation of J-Devices (Note 3). |
Fair Value Measurements |
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Fair Value Measurements |
The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers as follows: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities and Level 3, defined as unobservable inputs that are not corroborated by market data. The fair values of cash, accounts receivable, trade accounts payable, capital expenditures payable, and certain other current assets and accrued expenses approximate carrying values because of their short-term nature. The carrying value of other non-current liabilities approximates fair value. Our assets and liabilities recorded at fair value on a recurring basis include cash equivalent money market funds and restricted cash money market funds. Cash equivalent money market funds and restricted cash money market funds are invested in U.S. money market funds and various U.S. and foreign bank operating and time deposit accounts, which are due on demand or carry a maturity date of less than three months when purchased. No restrictions have been imposed on us regarding withdrawal of balances with respect to our cash equivalents as a result of liquidity or other credit market issues affecting the money market funds we invest in or the counterparty financial institutions holding our deposits. Money market funds are valued using quoted market prices in active markets for identical assets. Our recurring fair value measurements consist of the following:
We also measure certain assets and liabilities, including property, plant and equipment at fair value on a nonrecurring basis. We measure the fair value of our debt for disclosure purposes. The following table presents the fair value of financial instruments that are not recorded at fair value on a recurring basis:
The estimated fair value of our senior notes is based primarily on quoted market prices reported on or near the respective balance sheet dates. The estimated fair value of our revolving credit facility and term loans was calculated using a discounted cash flow analysis, which utilized market based assumptions including forward interest rates adjusted for credit risk. |
Commitments and Contingencies |
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Commitments and Contingencies |
We have a letter of credit sub-facility of $25.0 million under our $200.0 million senior secured revolving credit facility that matures in December 2019. As of December 31, 2015, we had $0.5 million of standby letters of credit outstanding. Such standby letters of credit are used in the ordinary course of our business and are collateralized by our cash balances. We generally warrant that our services will be performed in a professional and workmanlike manner and in compliance with our customers’ specifications. We accrue costs for known warranty issues. Historically, our warranty costs have been immaterial. Legal Proceedings We are involved in claims and legal proceedings and may become involved in other legal matters arising in the ordinary course of our business. We evaluate these claims and legal matters on a case-by-case basis to make a determination as to the impact, if any, on our business, liquidity, results of operations, financial condition or cash flows. Although the outcome of these matters is uncertain, we believe that the ultimate outcome of these claims and proceedings, individually and in the aggregate, will not have a material adverse impact to us. Our evaluation of the potential impact of these claims and legal proceedings on our business, liquidity, results of operations, financial condition or cash flows could change in the future. Settlement of Patent License Litigation In January 2015, we settled our patent license litigation with Tessera. Under the terms of the settlement, Amkor agreed to pay Tessera a total of $155.0 million in 16 equal quarterly recurring payments commencing in the first quarter of 2015, and continuing through the fourth quarter of 2018. During the three months ended December 31, 2014, we recorded a pre-tax charge of $87.1 million, of which $75.3 million was charged to cost of sales and $11.8 million was charged to interest expense. This charge reflected the aggregate amount due under the settlement agreement, net of amounts previously reserved. At December 31, 2015, the remaining amount we owe Tessera under our settlement agreement was $116.3 million. The current portion of this liability is recorded in accrued expenses (Note 12) and the non-current portion is recorded in other non-current liabilities in our Consolidated Financial Statements. We will also charge $10.2 million of the amount owed to interest expense over the remaining three year term of the arrangement. Leases Future minimum lease payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year are:
Rent expense amounted to $24.5 million, $28.5 million and $23.8 million for 2015, 2014 and 2013, respectively. In order to provide packaging and test services, we purchase materials under various long-term supply contracts. Future minimum payments to be made under these contracts for the period 2016 through 2025 are $15.0 million. |
Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments, Customer Concentrations and Geographic Information |
We operate as a single operating segment as managed by our Chief Executive Officer, who is considered our chief operating decision maker ("CODM"). The CODM bears the ultimate responsibility for, and is actively engaged in, the allocation of resources and the evaluation of our operating and financial results. We have concluded that we have a single operating segment based on the following:
The following table presents net sales by product group:
The following table presents net sales by country based on customer location:
One customer accounted for 14.4%, 17.5% and 23.7% and a second customer accounted for 11.0%, 13.2%, and 10.5% of consolidated net sales in 2015, 2014 and 2013, respectively. The following table presents property, plant and equipment, net, based on the physical location of the asset:
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Schedule II - Valuation and Qualifying Accounts |
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Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
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Description of Business and Summary of Significant Accounting Policies (Policies) |
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Goodwill and Intangible Assets, Policy [Policy Text Block] | Goodwill is recorded when the cost of an acquisition exceeds the fair value of the net tangible and identifiable intangible assets acquired. We review goodwill for impairment annually during the fourth quarter of each year and whenever events or changes in circumstances indicate that an impairment exists. Impairment losses are recorded when the carrying amount of goodwill exceeds its implied fair value. No goodwill impairment has been identified in any of the years presented. |
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Nature of Operations [Text Block] | Amkor is one of the world’s leading providers of outsourced semiconductor packaging and test services. Amkor pioneered the outsourcing of semiconductor packaging and test services through a predecessor corporation in 1968, and over the years we have built a leading position by:
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Basis of Presentation | Our Consolidated Financial Statements include the accounts of Amkor Technology, Inc. and our subsidiaries (“Amkor”). Our Consolidated Financial Statements reflect the elimination of all significant inter-company accounts and transactions. On July 31, 2013, we completed the purchase of Amkor Technology Malaysia Sdn. Bhd. The financial results of the entity have been included in our Consolidated Financial Statements from the date of acquisition (Note 3). On June 30, 2014, we completed the sale of our Japanese subsidiary to J-Devices. The financial results of the divested entity were included in our Consolidated Financial Statements up to the date of sale and have subsequently been included in the results of J-Devices. On December 30, 2015, we increased our investment in J-Devices to 100% through the exercise of options. As a result, our accounting for J-Devices changed from the equity method to the consolidation method effective December 30, 2015. Our investments in variable interest entities in which we are the primary beneficiary are consolidated. We reflect the remaining portion of variable interest entities and foreign subsidiaries that are not wholly owned as noncontrolling interests. |
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Use of Estimates | The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to acquisitions, revenue recognition, income taxes, inventory, long lived assets and contingencies. These estimates are based on management’s best knowledge of current events, historical experience, actions that we may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results could differ materially from these estimates and assumptions. |
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Consolidation of Variable Interest Entities | We have variable interests in certain Philippine realty corporations in which we have a 40% ownership and from whom we lease land and buildings in the Philippines, for which we are the primary beneficiary. As of December 31, 2015, the combined book value of the assets and liabilities associated with these Philippine realty corporations included in our Consolidated Balance Sheet was $16.9 million and $0.2 million, respectively. The impact of consolidating these variable interest entities on our Consolidated Statements of Income was not significant, and other than our lease payments, we have not provided any significant assistance or other financial support to these variable interest entities for the years ended December 31, 2015, 2014 or 2013. The creditors of the Philippine realty corporations have no recourse to our general credit. |
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Foreign Currency Translation | The U.S. dollar is the functional currency of our subsidiaries, with the exception of J-Devices, and the foreign currency asset and liability amounts at these subsidiaries are remeasured into U.S. dollars at end-of-period exchange rates, except for nonmonetary items which are remeasured at historical rates. Foreign currency income and expenses are remeasured at daily exchange rates, except for expenses related to balance sheet amounts which are remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in other (income) expense, net in the period in which they occur. The Japanese Yen is the functional currency of J-Devices. The asset and liability amounts of J-Devices are translated into U.S. dollars at end-of-period exchange rates. Income and expenses are translated into U.S. dollars at average exchange rates in effect during the period. The resulting translation adjustments are reported as a component of accumulated other comprehensive income in the stockholders’ equity section of the balance sheet. Assets and liabilities denominated in a currency other than the functional currency are remeasured into the functional currency prior to translation into U.S. dollars, and the resulting transaction exchange gains or losses are included in other expense (income) in the period in which they occur. |
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Concentration Risk Disclosure [Text Block] | The semiconductor industry is characterized by rapid technological change, competitive pricing pressures and cyclical market patterns. Our financial results are affected by a wide variety of factors, including general economic conditions worldwide, economic conditions specific to the semiconductor industry, the timely implementation of new package and test technologies, the ability to safeguard patents and intellectual property in a rapidly evolving market and reliance on materials and equipment suppliers. In addition, the semiconductor market has historically been cyclical and subject to significant economic downturns at various times. Our profitability and ability to generate cash from operations is principally dependent upon demand for semiconductors, the utilization of our capacity, semiconductor package mix, the average selling price of our services, our ability to manage our capital expenditures and our ability to control our costs including labor, material, overhead and financing costs. A significant portion of our revenues is concentrated with a small group of customers (Note 18). The loss of a significant customer, a business combination among customers, a reduction in orders or decrease in price from a significant customer or disruption in any of our significant strategic partnerships or other commercial arrangements could have a material adverse effect on our business, liquidity, results of operations, financial condition and cash flows. Financial instruments, for which we are subject to credit risk, consist principally of accounts receivable and cash and cash equivalents. With respect to accounts receivable, we mitigate our credit risk by selling primarily to well-established companies, performing ongoing credit evaluations and making frequent contact with customers. In addition, we may utilize non-recourse factoring to mitigate credit risk when considered appropriate. We have historically mitigated our credit risk with respect to cash and cash equivalents through diversification of our holdings into various high quality money market funds and bank deposit accounts. At December 31, 2015, our cash and cash equivalents were invested in U.S. money market funds and various U.S. and foreign bank operating and time deposit accounts. |
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Risks and Uncertainties | We may be subject to certain legal proceedings, lawsuits and other claims, as discussed in Note 17. We accrue for a loss contingency, including legal proceedings, lawsuits, pending claims and other legal matters, when we conclude that the likelihood of a loss is probable and the amount of the loss can be reasonably estimated. When the reasonable estimate of the loss is within a range of amounts, and no amount in the range constitutes a better estimate than any other amount, we accrue for the amount at the low end of the range. We adjust our accruals from time to time as we receive additional information, but the loss we incur may be significantly greater than or less than the amount we have accrued. We disclose loss contingencies if we believe they are material and there is at least a reasonable possibility that a loss has been incurred. Attorney fees related to legal matters are expensed as incurred. |
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Cash and Cash Equivalents | We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Our cash and cash equivalents consist of amounts invested in U.S. money market funds and various U.S. and foreign bank operating and time deposit accounts. |
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Restricted Cash | Restricted cash, current, consists of short-term cash equivalents used to collateralize our daily banking services. Restricted cash, non-current, mainly consists of collateral to fulfill foreign trade compliance requirements. |
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Inventories | Inventories are stated at the lower of cost or market (net realizable value). Cost is principally determined by standard cost (on a first-in, first-out basis, with the exception of work-in-process which is determined on an average cost basis), all of which approximate actual cost. We review and set our standard costs as needed, but at a minimum on an annual basis. We reduce the carrying value of our inventories for the cost of inventory we estimate is excess and obsolete based on the age of our inventories. When a determination is made that the inventory will not be utilized in production or is not saleable, it is written-off. |
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Other Current Assets [Text Block] | Other current assets consist principally of prepaid assets, deferred tax assets and an investment in government securities by a foreign subsidiary to satisfy local regulatory requirements, which is recorded at amortized cost. |
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Property, Plant and Equipment | Property, plant and equipment are stated at cost. Depreciation is calculated by the straight-line method over the estimated useful lives of depreciable assets which are as follows:
Cost and accumulated depreciation for property retired or disposed of are removed from the accounts, and any resulting gain or loss is included in earnings. Expenditures for maintenance and repairs are charged to expense as incurred. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of a long-lived asset group to be held and used in operations is measured by a comparison of the carrying amount to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If such asset group is considered to be impaired, the impairment loss is measured as the amount by which the carrying amount of the asset group exceeds its fair value. Long-lived assets to be disposed of are carried at the lower of cost or fair value less the costs of disposal. |
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Investments | Our investment in J-Devices, a previously unconsolidated joint venture to provide semiconductor packaging and test services in Japan, was accounted for as an equity method investment before our ownership reached 100% on December 30, 2015. We evaluated our investment for other-than-temporary impairment whenever events or changes in circumstances indicated that the fair value of the investment may have been less than its carrying value. See Note 3 for additional information. |
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Schedule of Other Assets, Noncurrent [Table Text Block] | Other assets consist principally of deferred tax assets, refundable security deposits and deferred debt issuance costs. |
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Other Noncurrent Liabilities [Table Text Block] | Other non-current liabilities consist primarily of liabilities associated with the settlement of patent license litigation and uncertain income tax positions. See Note 17 for additional information on the settlement. |
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Fair Value Measurements | We apply fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. See Note 16 for further discussion of fair value measurements. |
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Revenue Recognition | We recognize revenue from our packaging and test services, net of value-added or other similar taxes, when there is evidence of an arrangement, delivery has occurred or services have been rendered, fees are fixed or determinable and collectibility is reasonably assured. Generally these criteria are met and revenue is recognized upon shipment or, in some cases, customer acceptance. If the revenue recognition criteria are not met, we defer the revenue. Deferred revenue generally results from two types of transactions: contractual invoicing at interim points in the packaging and test process prior to shipment of the finished product and customer advances for supply agreements with customers where we commit capacity in exchange for customer prepayment of services. These prepayments are deferred and recorded as customer advances within accrued expenses and other non-current liabilities. We generally do not take ownership of customer-supplied semiconductor wafers. Title and risk of loss remains with the customer for these materials at all times. Accordingly, the cost of the customer-supplied materials is not included in our Consolidated Financial Statements. An allowance for sales credits is recorded as a reduction to sales and accounts receivable during the period of sale such that accounts receivable is reported at its estimated net realizable value. The allowance for sales credits is an estimate of the future credits we will issue for billing adjustments primarily for invoicing corrections and miscellaneous customer claims and is estimated based upon recent credit issuance, historical experience and specific identification of known or expected sales credits at the end of the reporting period. Additionally, provisions are made for doubtful accounts when there is doubt as to the collectibility of accounts receivable. The allowance for doubtful accounts is recorded as bad debt expense and is classified as selling, general and administrative expense. The allowance for doubtful accounts is based upon specific identification of doubtful accounts considering the age of the receivable balance, the customer’s historical payment history and current credit worthiness as well as specific identification of any known or expected collectibility issues. Historically, our allowance for doubtful accounts has been immaterial. |
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Shipping and Handling Fees and Costs | Amounts billed to customers for shipping and handling are presented in net sales. Costs incurred for shipping and handling are included in cost of sales. |
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Research and Development Costs | Research and development expenses include costs attributable to the conduct of research and development programs primarily related to the development of new package designs or technologies and improving the efficiency and capabilities of our existing production processes. Such costs include salaries, payroll taxes, employee benefit costs, materials, supplies, depreciation and maintenance of research equipment, services provided by outside contractors and the allocable portions of facility costs such as rent, utilities, insurance, repairs and maintenance, depreciation and general support services. All costs associated with research and development are expensed as incurred. |
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Income Taxes | Income taxes are accounted for using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis as well as for net operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for those deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. We monitor on an ongoing basis our ability to utilize our deferred tax assets and whether there is a need for a related valuation allowance. In evaluating our ability to recover our deferred tax assets in the jurisdictions from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and results of recent operations. For most of our foreign deferred tax assets, we consider it more likely than not that we will have sufficient taxable income to allow us to realize these deferred tax assets. However, in the event taxable income falls short of current expectations, we may need to establish a valuation allowance against such deferred tax assets. We recognize in our Consolidated Financial Statements the impact of an income tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Related interest and penalties are classified as income taxes in the financial statements. See Note 6 for more information regarding unrecognized income tax benefits. |
Description of Business and Summary of Significant Accounting Policies (Tables) |
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Dec. 31, 2015 | |||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||
Property Plant and Equipment Policy | Depreciation is calculated by the straight-line method over the estimated useful lives of depreciable assets which are as follows:
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Acquisition and Divestiture (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Consideration Transferred and Identifiable Assets and Liabilities Assumed | The following table summarizes the consideration transferred to acquire J-Devices and the amounts of identifiable assets acquired and liabilities assumed at the acquisition date:
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Schedule of Pro Forma Information | The pro forma information does not include any potential revenue enhancements, cost synergies or other operating efficiencies that could result from the acquisition.
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Share-Based Compensation Plans (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of all common stock option activity | The following table summarizes our stock option activity for the year ended December 31, 2015:
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Assumptions used in valuing the weighted average fair values of the options granted | The following assumptions were used to calculate the weighted average fair values of the options granted:
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Restricted share activity | The following table summarizes our restricted share activity for the year ended December 31, 2015:
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Other Income and Expense (Tables) |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | Other income and expense consists of the following:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | Geographic sources of income (loss) before income taxes are as follows:
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Schedule of Components of Income Tax Expense (Benefit) | The components of the provision (benefit) for income taxes are as follows:
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Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between the U.S. federal statutory income tax rate of 35% and our income tax provision is as follows:
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Schedule of Deferred Tax Assets and Liabilities | The following is a summary of the components of our deferred tax assets and liabilities:
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Summary of Operating Loss Carryforwards | Our net operating loss carryforwards (“NOL’s”) are as follows:
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Schedule of Unrecognized Tax Benefits Rollforward | A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings per share | The following table summarizes the computation of basic and diluted EPS:
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Antidilutive effect of potential shares of common stock that were excluded from diluted earnings per share | The following table summarizes the potential shares of common stock that were excluded from diluted EPS, because the effect of including these potential shares was antidilutive:
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Inventories (Tables) |
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Inventories | Inventories consist of the following:
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Property, Plant and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property, plant and equipment | Property, plant and equipment consist of the following:
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Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of Goodwill | The following table presents the changes in the carrying amount of goodwill:
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Accrued Expenses (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Accrued expenses | Accrued expenses consist of the following:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Short term Borrowings And Long term Debt | Following is a summary of short-term borrowings and long-term debt:
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Schedule of Interest Rates | Refer to the table above for the interest rates on our fixed rate debt and to the table below for the interest rates on our variable rate debt.
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Schedule of Maturities of Long-term Debt | Maturities
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Pension and Severance Plans (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accrued Severance Obligation | The changes to the balance of our severance accrual are as follows:
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Schedule of Changes in Projected Benefit Obligations and Fair Value of Plan Assets | The following table summarizes the Plans’ benefit obligations, fair value of the Plans’ assets and the funded status of the Plans at December 31, 2015 and 2014.
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Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The following table summarizes, by component, the change in accumulated other comprehensive income related to our Plans:
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Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | Information for pension plans with benefit obligations in excess of plan assets are as follows:
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Components of net periodic pension cost | The following table summarizes net periodic pension costs:
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Schedule of Assumptions Used | The following table summarizes the weighted-average assumptions used in computing the net periodic pension cost and projected benefit obligation at December 31, 2015, 2014 and 2013:
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Schedule of Allocation of Plan Assets | The current rate of return assumption targets are based on asset allocation strategies as follows:
Philippine plan assets included Amkor common stock totaling $0.6 million and $0.7 million at December 31, 2015, and December 31, 2014, respectively. The fair value of our pension plan assets, by asset category utilizing the fair value hierarchy as discussed in Note 16, is as follows:
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Schedule of Expected Benefit Payments | The estimated future benefit payments related to our foreign defined benefit plans are as follows:
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Accumulated Other Comprehensive Income and Loss Accumulated Other Comprehensive Income and Loss (Tables) |
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Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table reflects the changes in accumulated other comprehensive income (loss), net of tax:
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Fair Value Measurements (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation of money market funds and restricted cash using quoted market prices in active markets for identical assets | Our recurring fair value measurements consist of the following:
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Financial instruments that are not recorded at fair value | The following table presents the fair value of financial instruments that are not recorded at fair value on a recurring basis:
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Commitments and Contingencies (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year are:
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Business Segments (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Products and Services [Table Text Block] | The following table presents net sales by product group:
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Net sales by country, and property, plant and equipment by physical location | The following table presents net sales by country based on customer location:
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Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country | The following table presents property, plant and equipment, net, based on the physical location of the asset:
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Description of Business and Summary of Significant Accounting Policies (Variable Interest Entity) (Details) - Variable Interest Entity, Primary Beneficiary [Member] $ in Millions |
12 Months Ended |
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Dec. 31, 2015
USD ($)
| |
Variable Interest Entity [Line Items] | |
Ownership Percentage | 40.00% |
Carrying Amount, Assets and Liabilities | $ 16.9 |
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | $ 0.2 |
Acquisitions and Divestiture (Consideration Transferred and Identifiable Assets and Liabilities Assumed) (Details) - USD ($) $ in Thousands |
Dec. 30, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Goodwill | $ 19,443 | $ 0 | |
J-Devices [Member] | |||
Fair value of consideration transferred: | |||
Cash | $ 105,391 | ||
Fair value of our previously held equity interest in J-Devices | 167,684 | ||
Total | 273,075 | ||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Cash | 127,968 | ||
Accounts receivable | 180,177 | ||
Inventory | 42,502 | ||
Other current assets | 2,363 | ||
Property, plant and equipment | 230,319 | ||
Other assets | 9,268 | ||
Short-term borrowings and current portion of long-term debt | (36,770) | ||
Other current liabilities | (251,405) | ||
Long-term debt | (18,885) | ||
Pension obligations | (22,250) | ||
Other non-current liabilities | (9,655) | ||
Total identifiable net assets | 253,632 | ||
Goodwill | 19,443 | ||
Total | $ 273,075 |
Acquisitions and Divestiture Pro forma consolidated operating results, nonrecurring activities (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Business Acquisition, Pro Forma Information, Nonrecurring Activities [Line Items] | ||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 18.3 | $ 29.3 | $ 30.6 | |
Japanese Subsidiary [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Activities [Line Items] | ||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 16.2 | |||
Disposal Group, Including Discontinued Operation, Foreign Currency Translation Gains (Losses) | $ 12.6 | |||
J-Devices [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Activities [Line Items] | ||||
Business Combination, pro forma adjustment, net gain (loss) | $ (13.9) |
Acquisitions and Divestiture (Pro Forma Consolidated Results of Operations - J-Devices) (Details) - J-Devices [Member] - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
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Business Acquisition [Line Items] | ||
Net sales | $ 3,696,495 | $ 4,051,076 |
Net income | 98,003 | 153,750 |
Net income attributable to Amkor | $ 95,207 | $ 150,249 |
Basic earnings per share | $ 0.40 | $ 0.65 |
Diluted earnings per share | $ 0.40 | $ 0.64 |
Acquisitions and Divestiture (Acquisition of Amkor Technology Malaysia Sd. Bhd.) (Details) $ in Thousands, ¥ in Billions |
1 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Mar. 31, 2014
USD ($)
|
Jul. 31, 2013
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
Dec. 31, 2015
JPY (¥)
|
Dec. 31, 2015
USD ($)
|
|
Business Acquisition [Line Items] | |||||||
Subsequent cash payment for remainder of acquisition price | $ 0 | $ 18,763 | $ 0 | ||||
Toshiba Electronics Malaysia [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Equity interest acquired (percent) | 100.00% | ||||||
Total price for interest acquired | $ 61,200 | ||||||
Cash payment to acquire interest | $ 42,400 | ||||||
Subsequent cash payment for remainder of acquisition price | $ 18,800 | ||||||
Royalty cap on license | ¥ 1.5 | $ 12,000 |
Share-Based Compensation Plans (Compensation Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 3.9 | $ 3.7 | $ 3.0 |
Share-Based Compensation Plans (Weighted Average Fair Value) (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected life (in years) | 5 years 10 months 6 days | 6 years 1 month 6 days | 6 years 2 months 12 days |
Risk-free interest rate | 1.80% | 2.00% | 1.70% |
Volatility | 45.00% | 57.00% | 60.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted average grant date fair value per option granted | $ 3.14 | $ 4.46 | $ 2.49 |
Other Income and Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Other Income and Expenses [Abstract] | |||
Interest income | $ (2,539) | $ (3,359) | $ (3,785) |
Foreign currency gain, net | (7,849) | (9,808) | (5,626) |
Loss on debt retirement | (9,560) | (757) | (12,330) |
Business combination, step acquisition, net gain (loss) | (13,878) | 0 | 0 |
Gain on sale of subsidiary to J-Devices (Note 3) | 0 | 9,155 | 0 |
Other income, net | (2,122) | (2,978) | (705) |
Total other (income) expense, net | $ 10,928 | $ (24,543) | $ 2,214 |
Income Taxes (Components of income tax expense and income before taxes, by jurisdiction) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Geographic sources of income (loss) before income taxes | |||
United States | $ (39,684) | $ 16,571 | $ (36,829) |
Foreign | 107,219 | 119,507 | 160,816 |
Income before taxes and equity in earnings of unconsolidated affiliate | 67,535 | 136,078 | 123,987 |
Components of the provision (benefit) for income taxes | |||
Current federal tax expense (benefit) | 0 | 0 | 0 |
Current state tax expense (benefit) | 11 | (46) | 0 |
Current foreign tax expense (benefit) | 28,721 | 51,081 | 30,902 |
Current income tax expense (benefit) | 28,732 | 51,035 | 30,902 |
Deferred federal tax expense (benefit) | 0 | 0 | (8,556) |
Deferred state tax expense (benefit) | 0 | 0 | 9 |
Deferred foreign tax expense (benefit) | (697) | (17,190) | 291 |
Deferred income tax expense (benefit) | (697) | (17,190) | (8,256) |
Income tax expense | $ 28,035 | $ 33,845 | $ 22,646 |
Income Taxes (Reconciliation of effective tax rate) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Reconciliation between statutory rate and income tax provision | |||
U.S. federal tax at 35% | $ 23,637 | $ 47,627 | $ 43,396 |
State taxes, net of federal benefit | 2,622 | 1,940 | 1,124 |
Foreign income taxed at different rates | (11,756) | 6,579 | (17,814) |
Foreign exchange (loss) gain | (5,680) | (17,321) | 844 |
Change in valuation allowance | 18,259 | (13,527) | (32,415) |
Adjustments related to prior years | (912) | 3,643 | 2,727 |
Income tax credits generated | (1,919) | (2,557) | (2,622) |
Repatriation of foreign earnings and profits | 91 | 3,958 | 6,499 |
Expiration of capital loss carryforward | 0 | 0 | 15,555 |
Expiration of net operating losses | 74 | 2,534 | 0 |
Non-deductible loss on acquisition of J-Devices (Note 3) | 4,857 | 0 | 0 |
Debt conversion costs | 0 | 0 | 4,067 |
Other | (1,238) | 969 | 1,285 |
Income tax expense | $ 28,035 | $ 33,845 | $ 22,646 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate | 35.00% |
Income Taxes (Tax holidays) (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Income Tax Holiday, Termination Date | 2024 | ||
Income Tax Holiday, Aggregate Dollar Amount | $ 3.3 | $ 0.9 | $ 4.8 |
Income Tax Holiday, Tax Benefit, Diluted Earnings Per Share | $ 0.01 | $ 0.00 | $ 0.02 |
Earnings Per Share (Antidilutive) (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Stock Options And Restricted Shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Stock options and restricted share awards | 1,858 | 1,303 | 4,890 |
Convertible Notes Due April 2014 [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Interest rate of convertible subordinated notes | 6.00% | 6.00% | 6.00% |
Factoring of Accounts Receivable Factoring of Accounts Receivable (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Total Factored [Member] | ||
Factoring of Accounts Receivable [Line Items] | ||
Accounts Receivable Sold without Recourse | $ 323.5 | $ 340.0 |
Factoring Fees [Member] | ||
Factoring of Accounts Receivable [Line Items] | ||
Accounts Receivable Sold without Recourse | $ 1.5 | $ 1.5 |
Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Inventories | ||
Raw materials and purchased components | $ 163,024 | $ 161,942 |
Work-in-process | 75,181 | 61,437 |
Total inventories | $ 238,205 | $ 223,379 |
Property, Plant and Equipment (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 6,072,394 | $ 5,369,418 | |
Depreciation | 492,500 | 463,500 | $ 406,700 |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 237,815 | 207,985 | |
Land [Member] | K5 Facility [Member] | KOREA, REPUBLIC OF | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 104,100 | ||
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 352,607 | 39,261 | |
Construction in Progress [Member] | K5 Facility [Member] | KOREA, REPUBLIC OF | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 312,100 | 29,800 | |
Accumulated Capitalized Interest Costs | $ 18,700 | $ 8,600 |
Goodwill (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Goodwill [Roll Forward] | |
Balance as of December 31, 2014 | $ 0 |
Goodwill acquired | 19,443 |
Balance as of December 31, 2015 | $ 19,443 |
J-Devices [Member] | |
Goodwill [Roll Forward] | |
Ownership interest in J-Devices (percent) | 100.00% |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Payables and Accruals [Abstract] | ||
Payroll and benefits | $ 95,011 | $ 77,635 |
Deferred revenue and customer advances | 49,243 | 56,829 |
Accrued settlement costs | 32,987 | 32,414 |
Income taxes payable | 21,448 | 31,580 |
Accrued severance plan obligations (Note 14) | 14,306 | 13,226 |
Accrued interest | 12,920 | 15,947 |
Other accrued expenses | 38,297 | 31,366 |
Total accrued expenses | $ 264,212 | $ 258,997 |
Debt (Maturities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Debt Disclosure [Abstract] | ||
2015 | $ 76,770 | |
2016 | 12,579 | |
2017 | 126,306 | |
2018 | 250,000 | |
2019 | 200,000 | |
Thereafter | 925,000 | |
Total debt | $ 1,590,655 | $ 1,525,000 |
Pension and Severance Plans (Changes and Components) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 12,481 | $ 5,042 | |
Interest cost | 2,954 | 3,051 | |
Recognized actuarial loss | (2,631) | 3,514 | |
Foreign Postretirement Benefit Plan, Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 12,481 | 5,042 | $ 5,909 |
Interest cost | 2,954 | 3,051 | 3,170 |
Expected return on plan assets | (3,330) | (3,094) | (3,508) |
Amortization of prior service cost | 34 | 116 | 231 |
Recognized actuarial loss | (91) | (141) | (142) |
Net periodic pension cost | 12,230 | 5,256 | 5,944 |
Curtailment gain | 0 | 0 | (176) |
Defined Benefit Plan, Recognized Net (Gain) Loss Due to Settlements | 27 | 97 | (120) |
Total pension expense | $ 12,257 | $ 5,353 | $ 5,648 |
Pension and Severance Plans (Defined Benefit Plans - Expected future contributions and other disclosures) (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |
Defined Benefit Plan, Estimated Future Employer Contributions in Next Fiscal Year | $ 24,100 |
2016 | 3,480 |
2017 | 5,284 |
2018 | 6,397 |
2019 | 8,975 |
2020 | 11,188 |
2021 to 2025 | $ 86,941 |
Pension and Severance Plans (Defined Contribution Plans) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Cost Recognized | $ 8.6 | $ 6.8 | $ 5.2 |
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - Fair Value, Inputs, Level 1 [Member] - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair value assets measured on recurring basis | ||
Cash equivalent money market funds | $ 81,473 | $ 145,938 |
Restricted cash money market funds | $ 2,000 | $ 2,681 |
Commitments and Contingencies (Future minimum lease payments) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Unrecorded Unconditional Purchase Obligation [Line Items] | |||
2016 | $ 21,870 | ||
2017 | 15,316 | ||
2018 | 9,131 | ||
2019 | 8,526 | ||
2020 | 5,082 | ||
Thereafter | 12,218 | ||
Total | 72,143 | ||
Operating Leases, Rent Expense, Net | $ 24,500 | $ 28,500 | $ 23,800 |
Schedule II - Valuation and Qualifying Accounts (Details) - Valuation Allowance of Deferred Tax Assets [Member] - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Valuation Allowances and Reserves, Balance | $ 168,105 | $ 149,847 | $ 179,183 | $ 209,757 |
Valuation Allowances and Reserves, Charged to Cost and Expense | (18,507) | (10,838) | (16,860) | |
Valuation Allowances and Reserves, Write-offs | (248) | (2,534) | (15,555) | |
Valuation Allowances and Reserves, Charged to Other Accounts | (1) | (15,964) | (1,841) | |
Valuation Allowances and Reserves, Balance | $ 168,105 | $ 149,847 | $ 179,183 |
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