What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-19 compared with 2020-02-19 · 393 added, 260 removed, 878 unchanged (43% of the section changed)

6 unchanged sentences

Consolidated Statements of Stockholders’ Equity — Years ended December 31, 2020, 2019 and 2018

Consolidated Statements of Cash Flows — Years ended December 31, 2019, 2018 and 2017

Consolidated Statements of Cash Flows — Years December 31, 2020, 2019 and 2018

Notes to Consolidated Financial Statements

38 unchanged sentences

Management monitors on an ongoing basis its ability to utilize deferred tax assets and whether there is a need for a related valuation allowance.

In evaluating the ability to recover deferred tax assets in the jurisdictions from which they arise, management considers 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.

The Company operates in and files income tax returns in various U.S.

1 unchanged sentence

Years open to examination 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.

The principal considerations for our determination that performing procedures relating to accounting for income taxes is a critical audit matter are there was significant judgment by management in determining the income tax provision and other tax positions.

The principal considerations for our determination that performing procedures relating to accounting for income taxes is a critical audit matter are the significant judgment by management in determining the income tax provision and other tax positions.

This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and in evaluating audit evidence relating to income taxes.

10 unchanged sentences

For the Year Ended December 31,

2020 2019 2018

(In thousands, except per share data)

Net sales $ 5,050,589 $ 4,052,650 $ 4,316,466

Cost of sales 4,149,775 3,403,211 3,605,901

Gross profit 900,814 649,439 710,565

Selling, general and administrative 302,842 278,631 295,239

Research and development 140,727 137,638 157,182

Gain on sale of real estate

Total operating expenses 443,569 416,269 452,421

1 unchanged sentence

Interest expense 64,168 71,587 78,946

Interest expense, related party

Other (income) expense, net 6,395 1,773 ( 6,617 )

2 unchanged sentences

Income tax expense 46,183 37,182 56,250

Net income 340,499 122,628 129,565

Net income attributable to noncontrolling interests ( 2,361 ) ( 1,740 ) ( 2,473 )

1 unchanged sentence

Net income attributable to Amkor per common share:

Basic $ 1.40 $ 0.50 $ 0.53

Diluted $ 1.40 $ 0.50 $ 0.53

Shares used in computing per common share amounts:

Basic 241,509 239,725 239,329

Diluted 242,248 240,122 239,741

The accompanying notes are an integral part of these statements.

2 unchanged sentences

For the Year Ended December 31,

2020 2019 2018

(In thousands)

Net income $ 340,499 $ 122,628 $ 129,565

Other comprehensive income (loss), net of tax:

Adjustments to net unrealized gains (losses) on available-for-sale debt investments 21 — —

Adjustments to unrealized components of defined benefit pension plans 602 ( 7,479 ) ( 3,644 )

12 unchanged sentences

Restricted cash 1,007 610

Short-term investments (amortized cost of $ 133,744 in 2020)

133,769 6,348

Accounts receivable, net of allowances of $ 863 and $ 1,314 , respectively

962,643 850,753

Inventories 297,293 220,602

Other current assets 40,218 28,272

2 unchanged sentences

Operating lease right of use assets 147,236 148,549

Goodwill 27,325 25,976

Restricted cash 3,188 2,974

Other assets 145,628 111,733

Total assets $ 5,022,311 $ 4,695,615

LIABILITIES AND EQUITY

18 unchanged sentences

Treasury stock, at cost, 46,094 and 46,072 shares, respectively

( 217,740 ) ( 217,479 )

Total Amkor stockholders’ equity 2,325,699 1,963,739

Noncontrolling interests in subsidiaries 28,260 26,500

Total equity 2,353,959 1,990,239

Total liabilities and equity $ 5,022,311 $ 4,695,615

3 unchanged sentences

Additional Paid-

Retained Earnings (Accumulated

In Capital Retained Earnings (Accumulated

Deficit) Accumulated

Comprehensive

Income (Loss)

Income (Loss) Total Amkor

Stockholders’

Noncontrolling

Treasury Stock

Equity Noncontrolling

Subsidiaries Total

Common Stock Treasury Stock

Shares Par Value Shares Cost

(In thousands)

Balance at December 31, 2017 285,129 $ 285 $ 1,903,357 $ ( 13,903 ) $ 22,519 ( 45,945 ) $ ( 215,982 ) $ 1,696,276 $ 23,433 $ 1,719,709

Net income — — — 127,092 — — — 127,092 2,473 129,565

Other comprehensive income (loss) — — — — 1,293 — — 1,293 — 1,293

4 unchanged sentences

Balance at December 31, 2018 285,352 $ 285 $ 1,909,425 $ 113,189 $ 23,812 ( 45,967 ) $ ( 216,171 ) $ 1,830,540 $ 25,360 $ 1,855,900

Net income — — — 120,888 — — — 120,888 1,740 122,628

Other comprehensive income (loss) — — — — ( 4,697 ) — — ( 4,697 ) — ( 4,697 )

4 unchanged sentences

Balance at December 31, 2019 286,877 $ 287 $ 1,927,739 $ 234,077 $ 19,115 ( 46,072 ) $ ( 217,479 ) $ 1,963,739 $ 26,500 $ 1,990,239

Net income — — — 338,138 — — — 338,138 2,361 340,499

Other comprehensive income (loss) — — — — 8,155 — — 8,155 — 8,155

2 unchanged sentences

Share-based compensation — — 8,030 — — — — 8,030 — 8,030

Cash dividends declared — — — ( 9,713 ) — — — ( 9,713 ) — ( 9,713 )

Subsidiary dividends to noncontrolling interests — — — — — — — — ( 601 ) ( 601 )

4 unchanged sentences

For the Year Ended December 31,

2020 2019 2018

(In thousands)

Cash flows from operating activities:

Net income $ 340,499 $ 122,628 $ 129,565

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

Depreciation and amortization 510,396 524,177 571,961

Gain on sale of real estate

Amortization of deferred debt issuance costs and premiums 1,979 1,640 1,120

3 unchanged sentences

Share-based compensation 8,030 6,911 5,018

Other, net ( 779 ) 4,394 2,558

Changes in assets and liabilities, net of acquisitions:

Accounts receivable ( 106,693 ) ( 124,140 ) 80,571

Inventories ( 75,499 ) 10,208 ( 16,310 )

Other current assets ( 12,348 ) ( 2,369 ) 4,329

Other assets ( 22,614 ) 2,253 1,986

Trade accounts payable 48,786 38,670 ( 43,490 )

9 unchanged sentences

Proceeds from insurance recovery for property, plant and equipment — 1,538 1,371

Payments for short-term investments ( 535,368 ) ( 5,935 ) ( 6,477 )

Proceeds from sale of short-term investments 247,081 — —

Proceeds from maturities of short-term investments 159,015 6,469 4,829

Proceeds from foreign exchange forward contracts 49,226 13,550 6,754

Payments for foreign exchange forward contracts ( 14,031 ) ( 15,593 ) ( 5,864 )

Acquisition of business, net of cash acquired

Other investing activities 4,574 ( 202 ) 6,285

7 unchanged sentences

Payments of long-term debt ( 648,514 ) ( 862,927 ) ( 535,738 )

Payments of long-term debt, related party

Payments for debt issuance costs ( 1,644 ) ( 7,027 ) ( 3,796 )

Payments of finance lease obligations ( 9,851 ) ( 6,574 ) ( 3,930 )

Payment of deferred consideration for purchase of facility

Proceeds from issuance of stock through share-based compensation plans 17,611 11,405 1,050

Other financing activities ( 1,770 ) ( 1,001 ) 3,855

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities ( 333,719 ) 108,250 ( 40,623 )

Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash 6,056 870 ( 204 )

Net increase in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash ( 196,335 ) 210,481 85,200

Cash, cash equivalents and restricted cash, beginning of period 898,532 688,051 602,851

4 unchanged sentences

For the Year Ended December 31,

2020 2019 2018

(In thousands)

1 unchanged sentence

Cash paid during the period for:

Interest $ 61,295 $ 65,992 $ 77,575

Income taxes 43,404 44,495 63,080

Non-cash investing and financing activities:

Property, plant and equipment included in capital expenditures payable 181,376 77,250 256,070

Right of use assets acquired through finance lease liabilities

Right of use assets acquired through operating lease liabilities 41,672 60,963 —

Right of use assets acquired through finance lease liabilities 10,517 10,835 17,163

Dividends declared and unpaid 9,713 — —

The accompanying notes are an integral part of these statements.

11 unchanged sentences

• 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

• Building expertise in high-volume manufacturing processes and developing a reputation for high quality and solid execution;

• 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, Portugal and Taiwan.

3 unchanged sentences

Our Consolidated Financial Statements reflect the elimination of all significant inter-company accounts and transactions.

On May 22, 2017, we completed the purchase of Nanium, S.A.

Nanium’s financial results have been included in our Consolidated Financial Statements from the date of acquisition ( Note 3 ).

Our investments in variable interest entities in which we are the primary beneficiary are consolidated.

4 unchanged sentences

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.

As a result, actual results could differ materially from these estimates and assumptions, including the impact of Covid-19 and any deterioration in the global business and economic environment.

Certain prior year amounts have been reclassified to conform to current year presentation.

3 unchanged sentences

As of December 31, 2020, the combined book value of the assets and liabilities associated with these Philippine realty corporations included in our Consolidated Balance Sheet was $ 17.0 million and $ 0.1 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, 2019 , 2018 or 2017 .

The creditors of the Philippine realty corporations have no recourse to our general credit.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

interest entities for the years ended December 31, 2020, 2019 or 2018.

The creditors of the Philippine realty corporations have no recourse to our general credit.

Foreign Currency Translation

dollar is the functional currency of our subsidiaries other than our Japan operations, and the foreign currency asset and liability amounts at these subsidiaries are remeasured into U.S.

dollar is the functional currency of our subsidiaries other than our Japan operations.

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.

15 unchanged sentences

A significant portion of our revenues is concentrated with a small group of customers (Note 18).

Direct sales to our largest customer increased during 2020 and accounted for 14.5 % of our net revenue for the year ended December 31, 2020.

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.

Financial instruments, for which we are subject to credit risk, consist principally of accounts receivable and cash, cash equivalents and short-term investments.

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.

1 unchanged sentence

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.

Our short-term investments are principally investments in debt securities with maximum duration of twelve months and ranges from AAA to BBB rated financial instruments.

Our short-term investments are primarily in direct obligation of the US Government or its agencies, corporate bonds, asset backed securities, commercial paper, and municipal bonds.

At December 31, 2020, our cash and cash equivalents were maintained in various U.S.

1 unchanged sentence

money market funds.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Contingencies and Litigation

5 unchanged sentences

Attorney fees related to legal matters are expensed as incurred.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Cash and Cash Equivalents

6 unchanged sentences

Restricted cash, non-current, mainly consists of collateral to fulfill foreign trade compliance requirements.

Generally, we classify our short-term investments in fixed income securities as available-for-sale debt investments.

All of our available-for-sale debt investments as of December 31, 2020 are available to fund current operations and are recorded at fair value (Note 6).

Unrealized gains and losses on our available-for-sale debt investments are included as a separate component of accumulated other comprehensive income (loss), net of tax.

Realized gains and losses on our available-for-sale debt investments and declines in value judged to be an impairment are included in other (income) expense, net.

The cost of short-term investments matured or sold is based on the average cost method.

We evaluate on an ongoing basis the market conditions, trends of earnings, financial condition, credit ratings, any underlying collateral and other key measures for our short-term investments in determining if and when a decline in value below the adjusted cost of our available-for-sale debt investments is an impairment.

An impairment is considered if (i) we have the intent to sell the security, (ii) it is more likely than not that we will be required to sell the security before recovery of the entire amortized cost basis or (iii) we do not expect to recover the entire amortized cost basis of the security.

If impairment is considered on condition (i) or (ii) above, the entire difference between the amortized cost and the fair value of the debt security is recognized in earnings.

If impairment is considered based on condition (iii), the amount representing credit losses will be recognized in earnings and as an allowance for credit losses.

The amount relating to all other factors will be recognized in other comprehensive income.

Inventories consist of raw materials and purchased components and are stated at the lower of cost and net realizable value.

4 unchanged sentences

Other Current Assets

Other current assets consist principally of prepaid assets and an investment in government securities by a foreign subsidiary to satisfy local regulatory requirements, which is recorded at amortized cost.

Other current assets consist principally of prepaid assets.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Property, Plant and Equipment

1 unchanged sentence

Depreciation is calculated by the straight-line method over the estimated useful lives of depreciable assets which are as follows:

Buildings and improvements

10 to 40 years

Machinery and equipment

Software and computer equipment

Furniture, fixtures and other equipment

4 to 10 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

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.

5 unchanged sentences

We lease certain machinery and equipment, office space, and manufacturing facilities.

Effective January 1, 2019, we adopted the requirements of the Financial Accounting Standards Board Accounting Standards Codification 842, Leases, using the modified transition approach without restating the comparative period financial statements or disclosures.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.

We account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) combined with the non-lease components (e.g., common-area maintenance costs).

We combine lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) with the non-lease components (e.g., common-area maintenance costs) for all asset classes.

We use our incremental borrowing rate based on the information available at the lease commencement date to determine the lease liability.

Our leases have remaining lease terms ranging from less than one year to 85 years.

For purposes of calculating our lease liabilities, our

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise those options.

For purposes of calculating our lease liabilities, our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise those options.

Certain leases also include options to purchase the leased property.

3 unchanged sentences

The balance of goodwill in our Consolidated Balance Sheets reflects adjustments for foreign currency translation.

Other assets consist principally of deferred tax assets and refundable security deposits.

Other assets consist principally of deferred tax assets, refundable security deposits, and non-current prepaid taxes.

We use foreign exchange forward contracts to manage exposure to foreign exchange risk which are generally settled monthly.

2 unchanged sentences

See Note 15 for further discussion about the derivatives.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Fair Value Measurements

21 unchanged sentences

Services are generally billed at completion of each individual packaging or test service or in some instances at the completion of all services in a combined offering.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

We recognize revenue over time as services are rendered because our services create or enhance the customer’s wafer.

8 unchanged sentences

These amounts are included in accounts receivable, net of allowances in our Consolidated Balance Sheets.

At times, the company receives cash payments from customers in advance of the company’s performance.

In such cases, we record deferred revenue until the performance obligation is satisfied, which represents a contract liability and is included in accrued expenses and other non-current liabilities in the consolidated balance sheets.

These contract liabilities are classified as either current or long-term based on the timing of when the company expects to recognize

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Contract liabilities were $ 51.6 million and $ 17.5 million as of December 31, 2020 and December 31, 2019, respectively.

As of December 31, 2020 and December 31, 2019, the short-term portion of the liability was $ 30.3 million and $ 16.2 million, respectively.

Revenue recognized during the year that was included in the contract liability balance at the beginning of the period was $ 14.1 million, $ 16.4 million, and $ 13.7 million, for 2020, 2019 and 2018, respectively.

Research and Development Costs

8 unchanged sentences

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 U.S.

4 unchanged sentences

See Note 4 for further discussion regarding unrecognized income tax benefits.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

New Accounting Standards

Recently Adopted Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) , which was subsequently amended and clarified.

Topic 842 requires a dual approach for lease accounting under which a lessee would account for leases as finance leases or operating leases.

The standard also requires the lessee to recognize a right-of-use asset and a corresponding lease liability for both finance leases and operating leases.

For finance leases, the lessee recognizes interest expense and amortization of the right-of-use asset, and for operating leases, the lessee recognizes a straight-line lease expense.

The standard permits the use of two alternative transition approaches, either with application in all comparative periods presented or with application beginning with the effective date without restating comparative period financial statements.

Effective January 1, 2019, we adopted the requirements of Topic 842 using the modified transition approach without restating the comparative period financial statements.

The new standard resulted in increases in our operating lease right of use assets, accrued expenses and long-term operating lease liabilities account balances to record our operating leases on our Consolidated Balance Sheet.

The new standard also resulted in additional disclosures for our operating and finance leases (Note 10).

In accordance with Topic 842, we applied practical expedients permitted under the transition guidance, which allowed us to not:

Reassess whether any existing contracts are or contain a lease,

Reassess the lease classification for any existing contracts,

Reassess initial direct costs for any existing leases, and

Separate non-lease components from lease components and instead to account for them as a single lease component for all asset classes.

Acquisition of Nanium

On May 22, 2017, we completed the purchase of 100 % of the shares of Nanium, a provider of wafer-level fan-out semiconductor packaging solutions.

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 goodwill as a result of the acquisition.

Share-Based Compensation Plans

7 unchanged sentences

(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 is effective through 2027 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, 2019 there were 5.2 million shares available for grant.

Those eligible for awards include employees, directors and consultants who provide

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

services to Amkor and its subsidiaries.

The 2007 Plan is effective through 2027 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, 2020 there were 2.9 million shares available for grant.

Stock options

8 unchanged sentences

Treasury yield curve in effect at the time of grant.

The dividend yield is based on the annualized declared quarterly dividend rate divided by our closing stock price at the date of the grant.

The following table summarizes our stock option activity for the year ended December 31, 2020:

(In thousands)

Weighted-Average

(In thousands) Weighted-Average

Exercise Price

Weighted-Average

per Share Weighted-Average

Contractual Term

(Years) Aggregate

(In thousands)

Outstanding at December 31, 2019

Granted 805 12.85

Exercised ( 1,882 ) 9.26

Forfeited or expired ( 402 ) 9.56

Outstanding at December 31, 2020

4,366 $ 9.70 7.47 $ 23,391

Fully vested at December 31, 2020 and expected to vest thereafter

4,245 $ 9.66 7.43 $ 22,877

Exercisable at December 31, 2020

2,197 $ 8.92 6.41 $ 13,407

The following assumptions were used to calculate the weighted-average fair values of the options granted:

For the Year Ended December 31,

2020 2019 2018

Expected life (in years) 5.6 6.0 6.0

Risk-free interest rate 0.3 % 2.5 % 2.7 %

Volatility 52 % 43 % 42 %

Dividend yield 0.3 % — —

4 unchanged sentences

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 6.25 % of the shares vesting in equal quarterly installments 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

Generally, other restricted shares vest ratably over three years , with 8.33 % of the shares vesting in equal quarterly

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

grant and is recognized ratably over the vesting period.

installments such that 100 % of the shares will become vested on the third anniversary of the award, subject to the recipient’s continued employment with us on the applicable vesting dates.

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, 2020:

(In thousands)

Weighted- average

(In thousands) Weighted- average

Non-vested at December 31, 2019

7 unchanged sentences

For the Year Ended December 31,

2020 2019 2018

(In thousands)

2 unchanged sentences

Loss on debt retirement 3,042 8,536 1,512

Other ( 806 ) ( 2,052 ) ( 5,447 )

Total other (income) expense, net $ 6,395 $ 1,773 $ ( 6,617 )

1 unchanged sentence

For the Year Ended December 31,

2020 2019 2018

(In thousands)

United States $ 38,719 $ 1,138 $ 5,535

Foreign 347,963 158,672 180,280

Income before taxes $ 386,682 $ 159,810 $ 185,815

4 unchanged sentences

For the Year Ended December 31,

2020 2019 2018

(In thousands)

Federal $ 4,608 $ ( 179 ) $ 22,003

State 134 3 39

Foreign 38,298 11,427 47,318

43,040 11,251 69,360

Federal ( 7,877 ) 1,832 5,468

State ( 535 ) 299 2,993

Foreign 11,555 23,800 ( 21,571 )

3,143 25,931 ( 13,110 )

Income tax expense $ 46,183 $ 37,182 $ 56,250

The reconciliation between the U.S.

federal statutory income tax rate of 21% for 2019 and 2018 and 35% for 2017 and our income tax expense is as follows:

federal statutory income tax rate of 21% for 2020, 2019 and 2018 and our income tax expense is as follows:

For the Year Ended December 31,

2020 2019 2018

(In thousands)

11 unchanged sentences

Settlements and changes in uncertain tax positions 6,801 3,256 ( 1,230 )

Other 1,177 1,162 976

Income tax expense $ 46,183 $ 37,182 $ 56,250

The change in valuation allowance for 2019 , 2018 and 2017 , excluding the impact of the Tax Act, is primarily the result of changes in net operating loss, tax credit, and other carryforwards for which no tax expense or benefit has been recognized.

Prior to 2018, the benefit of foreign income taxed at different rates increased as foreign income before tax has increased.

The decrease in the U.S.

federal statutory income tax rate to 21% in 2018 has reduced the impact of foreign income taxed at different rates than the U.S.

The change in valuation allowance for 2020, 2019 and 2018 is primarily the result of changes in our ability to realize net operating loss, tax credit, and other carryforwards.

As a result of certain capital investments, export commitments and employment levels, income from operations in Korea, Malaysia, the Philippines and Singapore was subject to reduced income tax rates and, in some cases, was exempt from income taxes.

We recognized $ 27.6 million, $ 14.7 million and $ 1.9 million in tax benefits as a result of the tax holidays in 2020, 2019 and 2018, respectively.

The benefit of the tax holidays on diluted earnings per share was approximately $ 0.11 , $ 0.06 and $ 0.01 for 2020, 2019 and 2018, respectively.

AMKOR TECHNOLOGY, INC.

8 unchanged sentences

Accrued liabilities 57,586 61,812

Receivable 33,295 30,558

Unrealized foreign exchange loss 5,603 2,750

Operating lease liabilities 20,343 18,164

Other 11,741 11,889

Total deferred tax assets 282,063 288,796

7 unchanged sentences

Operating lease right of use assets 19,704 17,687

Other 4,514 4,125

Total deferred tax liabilities 72,216 61,527

1 unchanged sentence

Recognized as:

Other assets $ 95,045 $ 90,465

Other non-current liabilities ( 6,508 ) ( 130 )

Total $ 88,537 $ 90,335

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.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Valuation allowance against deferred tax assets consist of the following:

1 unchanged sentence

Valuation allowance:

$ 62,820 $ 80,241

Foreign 58,490 56,693

Total valuation allowance $ 121,310 $ 136,934

As a result of certain capital investments, export commitments and employment levels, income from operations in Korea, Malaysia, the Philippines, Singapore and Taiwan was subject to reduced income tax rates and, in some cases, was exempt from income taxes.

We recognized $ 14.7 million , $ 1.9 million and $ 6.2 million in tax benefits as a result of the tax holidays

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

in 2019 , 2018 and 2017 , respectively.

The benefit of the tax holidays on diluted earnings per share was approximately $ 0.06 , $ 0.01 and $ 0.03 for 2019 , 2018 and 2017 , respectively.

We had recorded a valuation allowance against our interest expense carryforward as a result of the limitation of deductibility of interest expense contained in the Tax Act.

Realization of the carryforward is dependent on generating sufficient taxable income to overcome the interest limitation provisions.

Although utilization of this carryforward is not assured, in light of our current earnings and recent estimates of future taxable income, management believes sufficient positive evidence exists to conclude that the valuation allowance is no longer needed and reversed the $ 12.4 million valuation allowance in 2020.

Our net operating loss carryforwards (“NOLs”) are as follows:

2020 2019 Expiration

(In thousands)

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.

For most of our foreign net operating loss carryforwards, we consider it more likely than not that we will not have sufficient taxable income to allow us to realize these deferred tax assets.

Federal NOLs $ 22,683 $ 23,977 2021-2024

State NOLs 88,170 93,674 2021-2038

Foreign NOLs 85,960 85,123 2022-2028

At December 31, 2020 and 2019, a portion of our remaining U.S.

1 unchanged sentence

Our tax credit carryforwards are as follows:

2020 2019 Expiration

(In thousands)

4 unchanged sentences

and foreign tax credit carryforwards were reserved with a valuation allowance for the amount expected to expire unused.

As a result of the deemed repatriation provision of the Tax Act, U.S.

income taxes have been provided on approximately $ 1.1 billion of the undistributed earnings of our foreign subsidiaries at December 31, 2017.

The income tax expense from the deemed repatriation was offset by net operating loss carryforwards and income tax credits resulting in a transition tax payable of $ 21.8 million .

Under an election of the Tax Act, the remaining transition tax is payable over eight years beginning with tax year 2017, with 8% due in each of the first five years, 15% in year six, 20% in year seven, and 25% in year eight.

Due to the changes in the Tax Act, distributions of cash to the U.S.

as dividends generally will not be subject to U.S.

federal income tax.

We have not provided foreign withholding taxes or state income taxes on the undistributed earnings of our foreign subsidiaries, 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.

1 unchanged sentence

We estimate that repatriation of these foreign earnings would generate withholding taxes and state income taxes of approximately $ 119.1 million.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

We operate in and file income tax returns in various U.S.

4 unchanged sentences

Our unrecognized tax benefits are subject to change as examinations of specific tax years are completed in the respective jurisdictions.

In certain circumstances where we elect to appeal the results of an examination, we may be

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

required to make tax assessment payments to proceed with the administrative appeal process.

Current examinations include our 2012, 2013 and 2018 Philippine income tax returns.

In certain circumstances where we elect to appeal the results of an examination, we may be required to make tax assessment payments to proceed with the administrative appeal process.

Current examinations include our 2012, 2013 and 2018 Philippine income tax returns and our 2018 Singapore income tax return.

A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:

For the Year Ended December 31,

2020 2019 2018

(In thousands)

7 unchanged sentences

The net increase in our unrecognized tax benefits was $ 6.4 million from December 31, 2019 to December 31, 2020.

The increase was primarily related to income attribution offset by the settlement of an examination of our 2015-2018 Korea tax returns.

The increase was primarily related to income attribution offset by decreases from the lapse of statutes of limitations.

At December 31, 2020, all of our gross unrecognized tax benefits would reduce our effective tax rate, if recognized.

12 unchanged sentences

For the Year Ended December 31,

2020 2019 2018

(In thousands, except per share data)

5 unchanged sentences

Net income attributable to Amkor per common share:

Basic $ 1.40 $ 0.50 $ 0.53

Diluted 1.40 0.50 0.53

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 anti-dilutive:

For the Year Ended December 31,

2020 2019 2018

(In thousands)

Stock options and restricted share awards 2,412 5,379 3,662

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table summarizes our cash equivalents and available-for-sale debt investments:

December 31, 2020

Fair Value Level

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses (1) Total Fair Value Level 1 Level 2

(In thousands)

Cash equivalents

Certificate of deposits $ 976 $ — $ — $ 976 $ 976 $ —

Commercial paper 5,293 — — 5,293 — 5,293

Corporate bonds 1,744 — — 1,744 — 1,744

Money market funds 138,290 — — 138,290 138,290 —

Municipal bonds 400 — — 400 — 400

Total cash equivalents (2) 146,703 — — 146,703 139,266 7,437

Short-term investments

Asset-backed securities 19,111 18 ( 9 ) 19,120 — 19,120

Certificate of deposits 5,046 — — 5,046 5,046 —

Commercial paper 15,148 — — 15,148 — 15,148

Corporate bonds 50,771 16 ( 12 ) 50,775 — 50,775

Municipal bonds 12,702 8 ( 2 ) 12,708 — 12,708

government agency bonds 8,415 3 — 8,418 — 8,418

government bonds 17,605 3 — 17,608 17,608 —

Variable rate demand notes 300 — — 300 — 300

Total short-term investments 129,098 48 ( 23 ) 129,123 22,654 106,469

Total (3) $ 275,801 $ 48 $ ( 23 ) $ 275,826 $ 161,920 $ 113,906

(1) All unrealized losses have been in a continuous loss position for less than 12 months.

We do not intend to sell the investments in an unrealized loss position, and we do not believe it is more likely than not that we will be required to sell these investments before recovery of their amortized cost bases.

(2) During the year ended December 31, 2020, we sold cash equivalent investments for proceeds of $ 27.1 million and realized no gain or loss on such sales.

(3) In January 2021, we increased our available-for-sale debt investments by approximately $ 60 million.

The following table summarizes the contractual maturities of our cash equivalents and available-for-sale debt investments as of December 31, 2020:

Amortized Cost Fair Value

Within 1 year $ 259,652 $ 259,667

After 1 year through 5 years 14,705 14,713

After 5 years through 10 years 1,444 1,446

Total $ 275,801 $ 275,826

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Actual maturities can differ from contractual maturities due to various factors including whether the issuers have the right to call or prepay obligations without call or prepayment penalties, and we view our available-for-sale debt investments as available for current operations.

As of December 31, 2020, the amortized cost and the fair market value of our held-to-maturity government bond (Level 1) maturing within a year is $ 4.7 million.

The following table summarizes our debt investments as of December 31, 2019:

December 31, 2019

(In thousands)

Cash equivalent money market funds (Level 1) (1) $ 384,474

Short-term investment government bond (Level 2) (2) 6,348

(1) The cash equivalent money market funds (Level 1) at December 31, 2019 have been corrected to include $ 286.7 million of cash equivalents that were excluded in previously reported amounts.

There was no change to total cash and cash equivalents reported on our consolidated balance sheet.

We determined this was immaterial to the prior period but have presented the balance as revised for comparability.

(2) The fair market value of the security is $ 6.3 million.

Factoring of Accounts Receivable

3 unchanged sentences

For the year ended December 31, 2020 and 2019, we sold accounts receivable totaling $ 499.3 million and $ 680.4 million, net of discounts and fees of $ 2.9 million and $ 4.4 million, respectively.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Property, Plant and Equipment

1 unchanged sentence

(In thousands)

Land use rights (1)

Land $ 221,304 $ 219,785

Buildings and improvements 1,625,355 1,571,653

1 unchanged sentence

Finance lease machinery and equipment 40,856 34,158

Software and computer equipment

Furniture, fixtures and other equipment 20,774 19,740

Software and computer equipment 231,171 220,264

Construction in progress 48,602 12,593

2 unchanged sentences

Total property, plant and equipment, net $ 2,566,002 $ 2,404,850

(1) Effective January 1, 2019, and in connection with the adoption of Topic 842, land use rights were reclassified to operating lease right of use asset within our Consolidated Balance Sheet.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table summarizes our depreciation expense:

For the Year Ended December 31,

2020 2019 2018

(In thousands)

Depreciation expense $ 509,770 $ 522,011 $ 570,304

As part of our plan to consolidate factory operations in Korea, we sold the land and buildings comprising our K1 factory in May 2017 for $ 142.4 million .

We received 10 % of the sale price at signing in November 2016 and the balance at closing, at which time we recognized a pre-tax gain of $ 108.1 million .

The components of lease expense were as follows:

For the Year Ended December 31,

(In thousands)

Operating lease cost $ 52,882 $ 41,559

6 unchanged sentences

Net lease cost $ 72,884 $ 62,075

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Rent expense was $ 43.6 million and $ 48.1 million for the for the year ended December 31, 2018 and 2017 , respectively.

Rent expense was $ 43.6 million for the year ended December 31, 2018.

Other information related to leases was as follows:

11 unchanged sentences

Finance leases 4.0 % 4.6 %

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Maturities of lease liabilities were as follows:

December 31, 2020

December 31, 2018

Operating Leases

Finance Leases

Operating Leases

Finance Leases

(In thousands)

Operating Leases Finance Leases

(In thousands)

2021 $ 55,196 $ 13,409

2022 36,850 6,395

2023 19,974 3,777

2024 10,213 1,063

2025 7,925 997

Thereafter 17,255 2,046

Total future minimum lease payments 147,413 27,687

Imputed interest ( 13,245 ) ( 1,997 )

Total $ 134,168 $ 25,690

As of December 31, 2020, we have entered into additional lease agreements that have not yet commenced of approximately $ 8 million.

5 unchanged sentences

Deferred revenue and customer advances 30,269 16,177

Accrued severance plan obligations (Note 13)

Income taxes payable 26,602 11,661

Accrued interest

Short-term finance lease liability 12,634 9,121

Accrued severance plan obligations (Note 12)

10,837 13,408

Accrued interest 10,767 11,638

Other accrued expenses 64,967 48,556

6 unchanged sentences

Senior notes:

6.375% Senior notes, due October 2022 (1)

6.625 % Senior notes, due September 2027

$ 525,000 $ 525,000

Other 2,039 —

Debt of subsidiaries:

Amkor Technology Korea, Inc.:

$30 million revolving credit facility, LIBOR plus the applicable bank rate, due October 2020 (2)

Term loan, fixed rate at 3.70%, due May 2020 (3)(5)

$ 30 million revolving credit facility, applicable bank rate plus 1.11 % (1)

Term loan, fund floating rate plus 1.60 %, due June 2020

Term loan, fixed rate at 1.80 %, due May 2021 (2)

Term loan, applicable bank rate plus 2.03 %, due July 2022

Term loan, applicable bank rate plus 2.03 %, due September 2022 (3)

Term loan, applicable bank rate plus 1.77 %, due April 2023 (4)

Term loan, LIBOR plus 2.56 %, due December 2023

Term loan, applicable bank rate plus 1.98 %, due December 2028 (5)

50,000 66,000

Amkor Technology Japan, Inc.:

1 unchanged sentence

Term loan, fixed rate at 0.86 %, due June 2022

14,528 23,018

Term loan, fixed rate at 0.60 %, due July 2022

Term loan, fixed rate at 1.30 %, due July 2023

138,499 179,541

Term loan, fixed rate at 1.35 %, due December 2024

220,823 262,407

Term loan, fixed rate at 1.20 %, due December 2025 (7)

Amkor Assembly & Test (Shanghai) Co., Ltd.:

Term loan, LIBOR plus 1.80%, due December 2019 (9)

Term loan, LIBOR plus 1.60 %, due March 2022

28,000 29,000

Term loan, LIBOR Plus 1.40 %, due March 2022

18,250 19,250

$ 250 million senior secured revolving credit facility, LIBOR plus 1.25 %- 1.75 %, due July 2023 (Singapore) (8)

Revolving credit facility, TAIFX plus the applicable bank rate, due November 2020 (Taiwan) (11)

Revolving credit facility, TAIFX plus the applicable bank rate, due December 2024 (Taiwan) (11)

Unamortized premium, discount and deferred debt costs, net

Credit facility, TAIFX plus the applicable bank rate, due December 2024 (Taiwan) (9) — 20,000

1,164,302 1,460,351

Unamortized discount and deferred debt costs, net ( 9,956 ) ( 10,117 )

Short-term borrowings and current portion of long-term debt ( 149,007 ) ( 144,479 )

Long-term debt $ 1,005,339 $ 1,305,755

(1) In October 2020, we renewed this revolving credit facility agreement for a one-year term with availability of $ 30.0 million.

Principal is payable at maturity, six months after draw of funds, and interest is payable monthly in arrears.

During the year ended December 31, 2020, we borrowed $ 60.0 million and repaid the full $ 60.0 million.

As of December 31, 2020, $ 30.0 million was available to be drawn.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

In April 2019, we redeemed the outstanding $ 525.0 million aggregate principal amount of our 6.375 % Senior Notes due 2022 (“2022 Notes”).

In accordance with the terms of the indenture governing the 2022 Notes, the redemption price was 101.594 % of the principal amount of the 2022 Notes plus accrued and unpaid interest.

We recorded an $ 8.4 million loss on extinguishment related to the call premium paid and other debt related costs associated with the 2022 Notes.

The redemption of the 2022 Notes was funded with net proceeds from our issuance of $ 525.0 million of 6.625 % Senior Notes due September 2027 (“2027 Notes”) in March 2019, together with cash on hand.

The 2027 Notes were issued at a discount of 99.5 % or $ 2.6 million and are senior unsecured obligations.

Interest is payable semiannually on March 15 and September 15 of each year, commencing September 15, 2019.

We incurred $ 3.6 million of debt issuance costs associated with the 2027 Notes.

In October 2019, we renewed our revolving credit facility agreement with availability of $ 30.0 million .

Interest is payable monthly in arrears.

Principal will be payable at the maturity date of October 2020.

As of December 31, 2019 , $ 30.0 million was available to be drawn.

In May 2017, we entered into a $ 120.0 million term loan agreement due May 2020.

During 2019, we repaid all $ 120.0 million of the outstanding balance of this term loan.

In May 2015, we entered into a term loan agreement pursuant to which we may borrow up to $ 150.0 million for capital expenditures.

Principal is payable at maturity in June 2020.

Interest is payable quarterly in arrears.

During 2019, we repaid $ 101.0 million of the outstanding balance of this term loan.

In February 2020, we repaid the remaining $ 24.0 million of the outstanding balance.

In July 2019, we entered into an agreement pursuant to which we may borrow up to $ 180.0 million for purchases of materials through two term loans.

(2) In May 2020, we entered into a KRW ₩ 60 billion term loan agreement with the option to re-borrow the funds through May 2021.

Principal is payable at maturity and interest is payable monthly in arrears, at a fixed rate of 1.80 %.

During the year ended December 31, 2020, we borrowed and repaid ₩ 60 billion ($ 48.4 million).

As of December 31, 2020, ₩ 60 billion, or approximately $ 55 million, was available to be drawn.

(3) In July 2019, we entered into a $ 140.0 million term loan due September 2022.

Principal is payable at maturity, and interest is payable quarterly in arrears.

We borrowed the full balance of $ 40.0 million under the first term loan in July 2019 to repay $ 40.0 million of the outstanding balance for the term loan due May 2020.

This term loan bears interest at a fixed rate of 3.80 % and has a maturity date of July 2022.

We borrowed $ 60.0 million under the second term loan in September 2019 to repay part of the term loan due June 2020.

The $ 60.0 million borrowing under the second term loan bears interest at a fixed rate of 3.59 % and has a maturity date of September 2022.

As of December 31, 2019 , $ 80.0 million was available to be drawn under the second term loan.

During the year ended December 31, 2020, we borrowed $ 80.0 million available under this loan and repaid the full $ 140.0 million.

(4) In April 2020, we borrowed KRW ₩ 150 billion (US$ 122.0 million) under a new term loan due April 2023.

Principal is payable at maturity and interest is payable monthly in arrears.

During the year ended December 31, 2020, we repaid KRW ₩ 94 billion ($ 86.0 million).

(5) In December 2018, we entered into a term loan agreement pursuant to which we may borrow up to $ 90.0 million for capital expenditures.

During 2019, we borrowed $ 42.0 million of this term loan and used the proceeds to repay part of the term loan due June 2020.

Principal of this term loan is payable in semiannual installments beginning June 2022 and ending at maturity in December 2028.

Interest is fixed at 4.5 % and is payable quarterly in arrears.

As of December 31, 2019, $ 24.0 million was available to be drawn.

In February 2020, we used the remaining $ 24.0 million to repay, in full, the term loan due June 2020.

We entered into various short-term loans which mature semiannually.

Principal is payable in monthly installments.

Principal is payable in semiannual installments and interest is payable quarterly in arrears (fixed at a weighted average of 3.88 % as of December 31, 2020).

(6) We entered into various short-term term loans which mature semiannually.

Principal and interest are payable in monthly installments.

As of December 31, 2020, $ 4.8 million was available to be drawn.

In December 2019, we entered into a ¥ 28.5 billion (US $ 260.6 million ) term loan agreement due December 2024, guaranteed by Amkor Technology Inc.

(7) In December 2020, we borrowed ¥ 10.9 billion (US$ 105.0 million) under a new term loan agreement due December 2025, guaranteed by Amkor Technology, Inc.

and our subsidiary, Amkor Technology Singapore Holding Pte, Ltd.

Principal is due in 20 equal, quarterly installments plus accrued interest, through maturity.

We immediately drew down $ 260.6 million .

In December 2019, we used the proceeds to pay down $ 80.0 million of the senior secured revolving credit facility due July 2023.

In January 2020, we also used these proceeds to repay $ 120.0 million of our term loan due December 2023.

The remaining proceeds will be used for other general corporate purposes.

In December 2016, we entered into a $ 50.0 million term loan agreement.

Principal is payable in semiannual installments of $ 0.5 million , with the remaining balance due at maturity in December 2019.

Interest is payable quarterly.

During the twelve months ended December 31, 2019 , we repaid the entire $ 48.0 million outstanding balance of this term loan using the proceeds from our term loans due March 2022.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

In March 2019, we entered into a $ 30.0 million term loan agreement due March 2022.

We borrowed $ 30.0 million under this term loan and used the proceeds to repay part of the term loan due December 2019.

Principal is payable in semiannual installments of $ 0.5 million , with the remaining balance due at maturity.

Interest is payable quarterly.

In April 2019, we entered into a term loan agreement with availability of $ 20.0 million due March 2022.

We borrowed $ 20.0 million under this term loan and used the proceeds to repay part of the term loan due December 2019.

Principal is payable in semiannual installments of $ 0.5 million , with the remaining balance due at maturity.

Interest is payable quarterly.

In July 2018, the senior secured revolving credit facility of Amkor Technology, Inc.

was terminated and replaced by a new facility due July 2023 entered into by our subsidiary, Amkor Technology Singapore Holding Pte, Ltd., and guaranteed by Amkor Technology, Inc.

We recorded a $ 0.4 million charge for the write-off of the associated unamortized debt issuance costs relating to the terminated credit facility.

The availability for the new revolving credit facility is based on the amount of eligible accounts receivable.

As of December 31, 2019 , $ 250.0 million was available to be drawn.

In November 2015, we entered into a $ 39.0 million revolving credit facility due November 2020.

In December 2019, we entered into a $ 56.0 million revolving credit facility due December 2024 to replace the $ 39.0 million revolving credit facility.

We immediately drew $ 20.0 million to repay the credit facility due November 2020.

(8) In July 2018, our subsidiary, Amkor Technology Singapore Holding Pte, Ltd., entered into a $ 250.0 million senior secured revolving credit facility, which is guaranteed by Amkor Technology, Inc.

The availability for our revolving credit facility is based on the amount of eligible accounts receivable.

Principal is payable at maturity.

As of December 31, 2019 , $ 36.0 million was available to be drawn under the credit facility due December 2024.

During the year ended December 31, 2020, we borrowed and repaid $ 150.0 million.

As of December 31, 2020, $ 250.0 million was available to be drawn.

(9) In December 2019, we entered into a $ 56.0 million borrowing arrangement.

This arrangement includes a $ 20.0 million term loan and a $ 36.0 million revolving credit facility.

During the year ended December 31, 2020, we borrowed $ 72.0 million and repaid $ 92.0 million.

As of December 31, 2020, $ 36.0 million was available to be drawn.

Certain of our foreign debt is collateralized by the land, buildings, equipment and accounts receivable in the respective locations.

3 unchanged sentences

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.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Amkor Technology Korea, Inc.:

Term loan, fund floating rate plus 1.60 %, due June 2020

Term loan, applicable bank rate plus 1.77 %, due April 2023

Term loan, LIBOR plus 2.56 %, due December 2023

2 unchanged sentences

Amkor Assembly & Test (Shanghai) Co., Ltd.:

Term loan, LIBOR plus 1.80%, due December 2019

Term loan, LIBOR plus 1.60 %, due March 2022

1.83 % 3.53 %

Term loan, LIBOR Plus 1.40 %, due March 2022

1.63 % 3.30 %

Amkor Technology Taiwan Ltd.:

Revolving credit facility, TAIFX plus the applicable bank rate, due November 2020

Revolving credit facility, TAIFX plus the applicable bank rate, due December 2024 — 3.35 %

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Compliance with Debt Covenants

4 unchanged sentences

guarantee certain debt of our subsidiaries.

The agreements governing our indebtedness contain affirmative, negative and financial 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.

The agreements governing our indebtedness contain affirmative and negative covenants which restrict our ability to pay dividends and could restrict our operations.

These restrictions are determined in part by calculations based upon cumulative net income or, in the case of our Singapore Revolver, borrowing availability, and do not currently have a material impact on our ability to make dividend payments or stock repurchases.

We were in compliance with all debt covenants at December 31, 2020 and 2019.

1 unchanged sentence

Payments due for the year ending December 31,

2021 $ 149,007

Thereafter 553,285

Total debt $ 1,164,302

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Pension and Severance Plans

9 unchanged sentences

Existing employees at that time were given the option of choosing either a defined benefit pension plan or a defined contribution plan for their future benefits and new employees since that date are enrolled in a defined contribution plan.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

The changes to the balance of our accrued severance plan obligations are as follows:

For the Year Ended December 31,

2020 2019 2018

(In thousands)

8 unchanged sentences

Non-current portion of accrued severance plan obligations $ 87,167 $ 113,978 $ 128,947

(1) In 2020, some employees accepted our offer to convert their Korean severance plan participation to a defined contribution plan.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Foreign Defined Benefit Pension Plans

6 unchanged sentences

Projected benefit obligation at January 1 $ 207,448 $ 175,712

Service cost 29,848 31,355

Interest cost 4,980 5,244

1 unchanged sentence

Actuarial (gain) loss 6,104 12,540

Effects of curtailment ( 2,410 ) —

Settlement (1) ( 31,804 ) ( 5,310 )

Foreign exchange (gain) loss 16,723 ( 351 )

4 unchanged sentences

Employer contributions 25,080 27,134

Settlement (1) ( 31,804 ) ( 5,310 )

Benefits paid ( 8,380 ) ( 11,742 )

2 unchanged sentences

Funded status of the Plans at December 31 $ ( 67,298 ) $ ( 62,290 )

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

(1) In 2020, some employees accepted our offer to convert their defined benefit pension plan participation to a defined contribution plan.

(In thousands)

4 unchanged sentences

The accumulated benefit obligation as of December 31, 2020 and 2019 was $ 164.7 million and $ 154.7 million, respectively.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table summarizes, by component, the change in accumulated other comprehensive income (loss), net of tax related to our Plans:

Prior Service

Actuarial Net Gain (Loss)

Cost Actuarial Net Gain (Loss) Total

(In thousands)

Balance at December 31, 2018 $ 602 $ 2,057 $ 2,659

Amortization included in net periodic pension cost

Amortization and settlement gain included in net periodic pension cost — ( 589 ) ( 589 )

Net gain (loss) arising during period — ( 6,890 ) ( 6,890 )

5 unchanged sentences

Balance at December 31, 2020 $ 602 $ ( 4,820 ) $ ( 4,218 )

Estimated amortization of cost to be included in 2020 net periodic pension cost

Information for pension plans with benefit obligations in excess of plan assets is as follows:

6 unchanged sentences

Aggregate fair value of plan assets 25,292 24,043

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table summarizes total pension expense:

For the Year Ended December 31,

2020 2019 2018

(In thousands)

Components of net periodic pension cost and total pension expense:

Service cost $ 29,848 $ 31,355 $ 32,913

Interest cost 4,980 5,244 4,867

3 unchanged sentences

Net periodic pension cost 29,378 29,813 31,999

Curtailment loss

Settlement (gain) loss 62 ( 210 ) ( 1,639 )

1 unchanged sentence

The components of net periodic pension cost other than the service cost component are included in other (income) expense, net in our Consolidated Statements of Income.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

The following table summarizes the weighted-average assumptions used in computing the net periodic pension cost and projected benefit obligations:

For the Year Ended December 31,

2020 2019 2018

Discount rate for determining net periodic pension cost 2.5 % 3.1 % 3.2 %

1 unchanged sentence

Rate of compensation increase for determining net periodic

pension cost 3.7 % 3.6 % 3.8 %

Rate of compensation increase for determining benefit obligations

1 unchanged sentence

Expected rate of return on plan assets for determining net periodic

pension cost 3.8 % 5.1 % 4.9 %

The measurement date for determining the Plans’ assets and benefit obligations is December 31, each year.

6 unchanged sentences

The current rate of return assumption targets are based on asset allocation strategies as follows:

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Debt Equity Other

Japan defined benefit plan 65 % 33 % 2 %

1 unchanged sentence

Philippine defined benefit plan 40 % 50 % 10 %

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

The fair value of our pension plan assets, by asset category utilizing the fair value hierarchy as discussed in Note 16, is as follows:

(In thousands)

Cash and cash equivalents (Level 1)

December 31, 2020 December 31, 2019 (1)

Level 1 Level 2 Total Level 1 Level 2 Total

(In thousands) (In thousands)

Cash and cash equivalents $ 1,219 $ — $ 1,219 $ 3,572 $ — $ 3,572

Equity securities 16,071 — 16,071 24,342 — 24,342

securities (Level 1)

securities (Level 2)

Foreign securities (Level 1)

Foreign securities (Level 2)

Foreign mutual funds (Level 1)

Debt securities

government bonds (Level 2)

corporate bonds (Level 2)

Foreign government bonds (Level 1)

Foreign government bonds (Level 2)

Foreign corporate bonds (Level 1)

Foreign corporate bonds (Level 2)

Foreign treasury notes (Level 1)

Foreign mutual funds (Level 1)

Foreign guaranteed investment contracts (Level 2)

Taiwan retirement fund (Level 1)

Other, net (Level 1)

Other, net (Level 2)

Government bonds 6,571 — 6,571 3,106 — 3,106

Treasury notes 8,069 — 8,069 3,516 — 3,516

Mutual and commingled funds

Equity funds 38,939 7,530 46,469 30,801 6,902 37,703

Debt funds 13,720 17,268 30,988 11,404 15,276 26,680

Guaranteed investment contracts — 34,281 34,281 — 33,931 33,931

Taiwan retirement fund 12,748 — 12,748 11,359 — 11,359

Other, net ( 2,365 ) 1,160 ( 1,205 ) 99 850 949

Total fair value of pension plan assets $ 94,972 $ 60,239 $ 155,211 $ 88,199 $ 56,959 $ 145,158

(1) In the current year, plan assets were categorized at the fund level rather than the underlying individual investment of the fund.

Prior year amounts were reclassified to conform to current year presentation.

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.

3 unchanged sentences

We intend to make at least the minimum contribution required by law each year.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

The estimated future benefit payments related to our foreign defined benefit plans are as follows:

(In thousands)

2021 $ 13,482

2026 to 2030 125,576

Defined Contribution Plans

1 unchanged sentence

Total defined contribution expense was $ 16.5 million, $ 13.6 million and $ 12.2 million for 2020, 2019 and 2018, respectively.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

In October 2020, we announced that our Board of Directors approved the initiation of a regular quarterly cash dividend on our common stock.

The first quarterly dividend of $ 0.04 per share, representing an initial dividend payment of $ 9.7 million in the aggregate, was paid on January 7, 2021 to stockholders of record as of December 18, 2020 .

Accumulated Other Comprehensive Income (Loss)

The following table reflects the changes in accumulated other comprehensive income (loss), net of tax:

Defined Benefit Pension

Foreign Currency Translation

Unrealized Gain (Losses) on Available-for-Sale Debt Investments (1) Defined Benefit Pension (2) Foreign Currency Translation Total

(In thousands)

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Balance at December 31, 2020 $ 21 $ ( 4,218 ) $ 31,467 $ 27,270

Amounts reclassified out of accumulated other comprehensive income (loss) are included as a component of net periodic pension cost ( Note 13 ) or other (income) expense, net.

(1) Amounts reclassified out of accumulated other comprehensive income (loss) are included as other (income) expense, net (Note 3).

(2) Amounts reclassified out of accumulated other comprehensive income (loss) are included as a component of net periodic pension cost (Note 12) or other (income) expense, net (Note 3).

We use foreign currency forward contracts to mitigate foreign currency risk of certain assets and monetary liabilities denominated in foreign currencies.

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As of December 31, 2020 and 2019, our foreign exchange forward contracts consisted of the following:

December 31, 2019

December 31, 2018

Notional Value

Fair Value (Level 2)

Balance Sheet Location

Notional Value

Fair Value (Level 2)

Balance Sheet Location

December 31, 2020 December 31, 2019

Notional Value Fair Value (Level 2) Balance Sheet Location Notional Value Fair Value (Level 2) Balance Sheet Location

(In thousands)

Other current assets

Japanese Yen $ 465,192 $ 1,279 Other current assets $ 391,643 $ 2,225 Other current assets

Korean Won 161,612 190 Other current assets 74,076 86 Other current assets

Philippine Peso 10,974 ( 7 ) Accrued expenses — — N/A

Total forward contracts $ 637,778 $ 1,462 $ 465,719 $ 2,311

For the years ended December 31, 2019 and 2018 , the derivatives resulted in a net gain of $ 0.1 million and $ 2.5 million , respectively, which were offset by the foreign currency losses associated with the underlying net liabilities.

We did not enter into any derivatives in 2017.

For the years ended December 31, 2020, 2019 and 2018, the derivatives resulted in a net gain of $ 35.9 million, $ 0.1 million and $ 2.5 million respectively, which were offset by the foreign currency losses associated with the underlying net liabilities.

Fair Value Measurements

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and Level 3, defined as unobservable inputs that are not corroborated by market data.

For our Level 2 short-term investments, including money market funds (Note 6), we use inputs such as actual trade data, benchmark yields, broker/dealer quotes, and other similar data, obtained from quoted market prices and independent pricing vendors, to determine the fair value of these assets and liabilities.

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.

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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 derivative financial instruments (Note 15) are valued using quoted market prices for similar assets.

Counterparties to these derivative contracts are highly rated financial institutions.

Recurring fair value measurements not otherwise disclosed elsewhere in our Consolidated Financial Statements consist of the following:

(In thousands)

Cash equivalent money market funds (Level 1)

Restricted cash money market funds (Level 1)

We also measure certain assets and liabilities, including property, plant and equipment, operating lease right of use assets and goodwill, at fair value on a nonrecurring basis.

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The following table presents the fair value of financial instruments that are not recorded at fair value on a recurring basis:

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Value Carrying

(In thousands)

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Under the terms of a January 2015 patent license litigation settlement, Amkor agreed to pay 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.

At December 31, 2019 and 2018, we have no remaining liability under this settlement agreement.

At December 31, 2020 and 2019, we had no remaining liability under this settlement agreement.

Purchase Commitments

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We have concluded that we have a single operating segment based on the following:

We are managed under a functionally-based organizational structure with the head of each function reporting directly to the CODM;

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

• 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;

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For the Year Ended December 31,

2020 2019 2018

(In thousands)

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For the Year Ended December 31,

2020 2019 2018

Communications (handheld devices, smartphones, tablets) 41 % 38 % 44 %

Automotive, industrial and other (driver assist, infotainment, performance, safety)

Consumer (connected home, set-top boxes, televisions, visual imaging, wearables) 24 % 18 % 12 %

Automotive, industrial and other (driver assist, infotainment, performance, safety) 20 % 27 % 26 %

Computing (datacenter, infrastructure, PC/laptop, storage)

15 % 17 % 18 %

Total net sales 100 % 100 % 100 %

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For the Year Ended December 31,

2020 2019 2018

(In thousands)

Japan $ 1,152,641 $ 1,061,265 $ 1,156,797

Europe, Middle East and Africa 848,301 625,592 605,932

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Total net sales $ 5,050,589 $ 4,052,650 $ 4,316,466

In 2019, no single customer accounted for more than 10% of total net sales.

One customer accounted for 10.2 % , and 14.3 % of net sales in 2018 and 2017 , respectively.

In 2020, one customer accounted for 14.5 % of total net sales and another customer accounted for 10.2 % of net sales in 2018.

No single customer accounted for more than 10% of net sales in 2019.

AMKOR TECHNOLOGY, INC.

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(In thousands)

China $ 397,849 $ 419,749

Japan 172,520 177,936

Korea 1,428,855 1,179,966

Malaysia 37,718 41,030

Philippines 187,108 215,941

Portugal 69,458 63,975

Taiwan 264,959 298,982

Other foreign countries 910 1,167

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Total property, plant and equipment, net $ 2,566,002 $ 2,404,850

Restructuring and Other Exit Activities

As part of our ongoing efforts to improve our manufacturing operations and manage costs, we regularly evaluate our staffing levels and facility requirements compared to business needs.

The following table summarizes our exit activities associated with these efforts.

“Charges” represents the initial charge related to the exit activity.

“Cash Payments” consists of the utilization of “Charges.” “Non-cash Amounts” consists of translation adjustments.

Japan Consolidation Activities

During the year ended December 31, 2020, we recorded restructuring charges of $ 18.0 million associated with our Japan factory consolidation efforts.

We recorded these charges to selling, general and administrative expenses within the Consolidated Statements of Income.

All amounts accrued at December 31, 2020 are classified as current liabilities.

We expect to complete these restructuring actions in the first half of fiscal 2021.

Facility Costs (1) Employee Separation Costs Other Exit Costs (2) Total

(In thousands)

Accrual at December 31, 2019 $ 2,196 $ 271 $ 174 $ 2,641

9,679 5,548 2,779 18,006

Cash payments ( 7,536 ) ( 4,056 ) ( 2,731 ) ( 14,323 )

Non-cash amounts 26 ( 4 ) ( 3 ) 19

Accrual at December 31, 2020 $ 4,365 $ 1,759 $ 219 $ 6,343

Total cumulative charges incurred to date $ 14,179 $ 8,258 $ 3,523 $ 25,960

Estimated additional charges to be incurred

$ 3,640 $ 275 $ 151 $ 4,066

(1) Facility costs primarily consist of equipment relocation costs directly resulting from the restructuring actions.

(2) Other exit costs primarily consist of employee relocation and training costs directly resulting from the restructuring actions.

AMKOR TECHNOLOGY, INC.

Notes to Consolidated Financial Statements — (Continued)

Quarterly Results (unaudited)

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For the Quarter Ended

Dec 31, 2019 (a)

Jun 30, 2019 (b)

Mar 31, 2019 (c)

Dec 31, 2018 (d)

Dec 31, 2020 (a) Sept 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 (b) Sept 30, 2019 Jun 30, 2019 (c) Mar 31, 2019 (d)

(In thousands, except per share data)

Net sales $ 1,371,041 $ 1,354,023 $ 1,172,909 $ 1,152,616 $ 1,178,464 $ 1,083,917 $ 895,305 $ 894,964

Gross profit 278,501 241,085 192,320 188,908 222,984 182,240 123,454 120,761

Operating income 159,179 127,469 86,524 84,073 118,385 78,855 22,510 13,420

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Net income (loss) attributable to Amkor per common share:

In the fourth quarter of 2019, we recorded a $ 3.8 million discrete income tax benefit, primarily related to changes in the valuation of certain deferred tax assets.

In the second quarter of 2019, we incurred an $ 8.4 million charge related to the early redemption of our 2022 Notes.

In the first quarter of 2019, we recorded a $ 14.9 million non-cash discrete income tax charge to reduce the value of certain deferred tax assets.

In the fourth quarter of 2018, we recorded a $ 22.3 million income tax expense to complete the accounting for the impact of the Tax Act, reducing our estimated net tax benefit of $ 41.6 million from 2017.

Basic $ 0.52 $ 0.38 $ 0.23 $ 0.27 $ 0.41 $ 0.23 $ ( 0.04 ) $ ( 0.10 )

Diluted $ 0.52 $ 0.38 $ 0.23 $ 0.26 $ 0.41 $ 0.23 $ ( 0.04 ) $ ( 0.10 )

(a) In the fourth quarter of 2020, we recorded a $ 20.2 million discrete tax benefit from the recognition of deferred tax assets we expect to utilize in future years.

(b) In the fourth quarter of 2019, we recorded a $ 3.8 million discrete income tax benefit, primarily related to changes in the valuation of certain deferred tax assets.

(c) In the second quarter of 2019, we incurred an $ 8.4 million charge related to the early redemption of our 2022 Notes.

(d) In the first quarter of 2019, we recorded a $ 14.9 million non-cash discrete income tax charge to reduce the value of certain deferred tax assets.

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

Additions (Credited) Charged to Expense

Period Additions (Credited) Charged to Expense Write-offs Balance at

End of Period

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Year ended at December 31, 2020 $ 136,934 ( 15,311 ) ( 313 ) $ 121,310

Column represents adjustments to the deferred tax asset valuation allowance established as part of the purchase accounting related to Amkor’s acquisition of Nanium in 2017 and adjustments directly through stockholders’ equity for changes in accumulated other comprehensive income (loss) related to our foreign defined benefit pension plans.

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data