SEC Filing | Amkor Technology

View:

Download DOC

Download PDF

Download XLS

Download XBRL

Document

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended	June 30, 2019
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission File Number 000-29472

AMKOR TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)



Delaware				23-1722724
(State of incorporation)				(I.R.S. Employer Identification Number)

2045 East Innovation Circle

Tempe, AZ 85284

(Address of principal executive offices and zip code)

(480) 821-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value	AMKR	The NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of outstanding shares of the registrant’s Common Stock as of July 26, 2019 was 239,704,033.

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended June 30, 2019

TABLE OF CONTENTS



		Page
PART I. Financial Information
Item 1.	Financial Statements (unaudited)	2
	Consolidated Statements of Income - Three and Six Months Ended June 30, 2019 and 2018	2
	Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2019 and 2018	3
	Consolidated Balance Sheets - June 30, 2019 and December 31, 2018	4
	Consolidated Statements of Stockholders’ Equity — Three and Six Months Ended June 30, 2019 and 2018	5
	Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2019 and 2018	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	29

PART II. Other Information
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
Signatures		49

This report contains forward-looking statements within the meaning of the federal securities laws, including but not limited to statements regarding (1) the amount, timing and focus of our expected capital investments in 2019 including expenditures in support of advanced packaging and test equipment, (2) our ability to fund our operating activities and financial requirements for the next twelve months, (3) the effect of changes in revenue levels and capacity utilization on our gross margin, (4) the focus of our research and development activities, (5) the anticipated impact of the Tax Cuts and Jobs Act (the “Tax Act”) on our taxes, (6) the grant and expiration of tax holidays in jurisdictions in which we operate and expectations regarding our effective tax rate and the availability of tax incentives, (7) the creation or release of valuation allowances related to taxes in the future, (8) our repurchase or repayment of outstanding debt, (9) payment of dividends, (10) compliance with our covenants, (11) expected contributions to foreign pension plans, (12) liability for unrecognized tax benefits and the potential impact of our unrecognized tax benefits on our effective tax rate, (13) the effect of foreign currency exchange rate exposure on our financial results, (14) the volatility of the trading price of our common stock, (15) changes to our internal controls related to integration of acquired operations and implementation of an enterprise resource planning system, (16) our efforts to enlarge our customer base in certain geographic areas and markets, (17) demand for advanced packages in mobile and automotive devices and our technology leadership and potential growth in this market, and (18) other statements that are not historical facts. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “intend” or the negative of these terms or other comparable terminology. Because such statements include risks and uncertainties, actual results may differ materially from those anticipated in such forward-looking statements as a result of various factors, including those set forth in the following report as well as in Part II, Item 1A of this Quarterly Report on Form 10-Q.

-1-

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands, except per share data)
Net sales	$	895,305		$	1,065,684		$	1,790,269		$	2,091,003
Cost of sales	771,851			895,967			1,546,054			1,763,515
Gross profit	123,454			169,717			244,215			327,488
Selling, general and administrative	64,758			74,700			136,345			155,423
Research and development	36,186			41,076			71,940			82,005
Total operating expenses	100,944			115,776			208,285			237,428
Operating income	22,510			53,941			35,930			90,060
Interest expense	18,653			21,127			37,926			41,138
Other (income) expense, net	6,966			(11,001		)	2,401			(7,569		)
Total other expense, net	25,619			10,126			40,327			33,569
Income (loss) before taxes	(3,109		)	43,815			(4,397		)	56,491
Income tax expense	5,897			10,631			27,277			13,112
Net income (loss)	(9,006		)	33,184			(31,674		)	43,379
Net income attributable to non-controlling interests	(444		)	(593		)	(655		)	(1,244		)
Net income (loss) attributable to Amkor	$	(9,450	)	$	32,591		$	(32,329	)	$	42,135

Net income (loss) attributable to Amkor per common share:
Basic	$	(0.04	)	$	0.14		$	(0.14	)	$	0.18
Diluted	$	(0.04	)	$	0.14		$	(0.14	)	$	0.18

Shares used in computing per common share amounts:
Basic	239,508			239,351			239,461			239,283
Diluted	239,508			239,804			239,461			239,805

The accompanying notes are an integral part of these statements.

- 2-

Table of Contents

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands)
Net income (loss)	$	(9,006	)	$	33,184		$	(31,674	)	$	43,379
Other comprehensive income (loss), net of tax:
Adjustments to unrealized components of defined benefit pension plans	(57		)	(42		)	(189		)	(81		)
Foreign currency translation	5,918			(11,144		)	3,694			3,947
Total other comprehensive income (loss)	5,861			(11,186		)	3,505			3,866
Comprehensive income (loss)	(3,145		)	21,998			(28,169		)	47,245
Comprehensive income attributable to non-controlling interests	(444		)	(593		)	(655		)	(1,244		)
Comprehensive income (loss) attributable to Amkor	$	(3,589	)	$	21,405		$	(28,824	)	$	46,001

The accompanying notes are an integral part of these statements.

- 3-

Table of Contents

AMKOR TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)



	June 30, 2019			December 31, 2018
	(In thousands, except per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	551,438		$	681,569
Restricted cash	2,590			2,589
Accounts receivable, net of allowances	702,466			724,456
Inventories	217,638			230,589
Other current assets	38,988			32,005
Total current assets	1,513,120			1,671,208
Property, plant and equipment, net	2,515,533			2,650,448
Operating lease right of use asset	132,763			—
Goodwill	26,159			25,720
Restricted cash	2,878			3,893
Other assets	118,831			144,178
Total assets	$	4,309,284		$	4,495,447
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	198,230		$	114,579
Trade accounts payable	459,548			530,398
Capital expenditures payable	134,500			255,237
Accrued expenses	246,615			258,209
Total current liabilities	1,038,893			1,158,423
Long-term debt	1,109,945			1,217,732
Pension and severance obligations	174,897			184,321
Long-term operating lease liability	80,049			—
Other non-current liabilities	74,324			79,071
Total liabilities	2,478,108			2,639,547
Commitments and contingencies (Note 15)
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; 285,510 and 285,352 shares issued; and 239,532 and 239,385 shares outstanding in 2019 and 2018, respectively	285			285
Additional paid-in capital	1,913,103			1,909,425
Retained earnings	80,860			113,189
Accumulated other comprehensive income (loss)	27,317			23,812
Treasury stock, at cost, 45,978 and 45,967 shares, in 2019 and 2018, respectively	(216,254		)	(216,171		)
Total Amkor stockholders’ equity	1,805,311			1,830,540
Non-controlling interests in subsidiaries	25,865			25,360
Total equity	1,831,176			1,855,900
Total liabilities and equity	$	4,309,284		$	4,495,447

The accompanying notes are an integral part of these statements.

- 4-

Table of Contents

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)



				Additional Paid- In Capital		Retained Earnings			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 March 31, 2019	285,430	$	285	$	1,911,179	$	90,310		$	21,456	(45,972	)	$	(216,219	)	$	1,807,011		$	25,571		$	1,832,582
Net income (loss)	—	—		—		(9,450		)	—		—		—			(9,450		)	444			(9,006		)
Other comprehensive income (loss)	—	—		—		—			5,861		—		—			5,861			—			5,861
Treasury stock acquired through surrender of shares for tax withholding	—	—		—		—			—		(6	)	(35		)	(35		)	—			(35		)
Issuance of stock through share-based compensation plans	80	—		150		—			—		—		—			150			—			150
Share-based compensation	—	—		1,774		—			—		—		—			1,774			—			1,774
Subsidiary dividends to noncontrolling interests	—	—		—		—			—		—		—			—			(150		)	(150		)
Balance at June 30, 2019	285,510	$	285	$	1,913,103	$	80,860		$	27,317	(45,978	)	$	(216,254	)	$	1,805,311		$	25,865		$	1,831,176

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 (loss)	—	—		—		(32,329		)	—		—		—			(32,329		)	655			(31,674		)
Other comprehensive income (loss)	—	—		—		—			3,505		—		—			3,505			—			3,505
Treasury stock acquired through surrender of shares for tax withholding	—	—		—		—			—		(11	)	(83		)	(83		)	—			(83		)
Issuance of stock through share-based compensation plans	158	—		436		—			—		—		—			436			—			436
Share-based compensation	—	—		3,242		—			—		—		—			3,242			—			3,242
Subsidiary dividends to noncontrolling interests	—	—		—		—			—		—		—			—			(150		)	(150		)
Balance at June 30, 2019	285,510	$	285	$	1,913,103	$	80,860		$	27,317	(45,978	)	$	(216,254	)	$	1,805,311		$	25,865		$	1,831,176

The accompanying notes are an integral part of these statements.

- 5-

Table of Contents

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)



				Additional Paid- In Capital		Retained Earnings (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 March 31, 2018	285,284	$	285	$	1,905,666	$	(4,359	)	$	37,571		(45,950	)	$	(216,038	)	$	1,723,125		$	23,949		$	1,747,074
Net income	—	—		—		32,591			—			—		—			32,591			593			33,184
Other comprehensive income (loss)	—	—		—		—			(11,186		)	—		—			(11,186		)	—			(11,186		)
Treasury stock acquired through surrender of shares for tax withholding	—	—		—		—			—			(6	)	(49		)	(49		)	—			(49		)
Issuance of stock through share-based compensation plans	38	—		1		—			—			—		—			1			—			1
Share-based compensation	—	—		1,269		—			—			—		—			1,269			—			1,269
Subsidiary dividends to noncontrolling interests	—	—		—		—			—			—		—			—			(135		)	(135		)
Balance at June 30, 2018	285,322	$	285	$	1,906,936	$	28,232		$	26,385		(45,956	)	$	(216,087	)	$	1,745,751		$	24,407		$	1,770,158

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	—	—		—		42,135			—			—		—			42,135			1,244			43,379
Other comprehensive income (loss)	—	—		—		—			3,866			—		—			3,866			—			3,866
Treasury stock acquired through surrender of shares for tax withholding	—	—		—		—			—			(11	)	(105		)	(105		)	—			(105		)
Issuance of stock through share-based compensation plans	193	—		1,023		—			—			—		—			1,023			—			1,023
Share-based compensation	—	—		2,556		—			—			—		—			2,556			—			2,556
Subsidiary dividends to noncontrolling interests	—	—		—		—			—			—		—			—			(270		)	(270		)
Balance at June 30, 2018	285,322	$	285	$	1,906,936	$	28,232		$	26,385		(45,956	)	$	(216,087	)	$	1,745,751		$	24,407		$	1,770,158

The accompanying notes are an integral part of these statements.

- 6-

Table of Contents

AMKOR TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	For the Six Months Ended June 30,
	2019			2018
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(31,674	)	$	43,379
Depreciation and amortization	268,819			285,515
Other operating activities and non-cash items	33,112			(3,239		)
Changes in assets and liabilities	(101,329		)	(119,276		)
Net cash provided by operating activities	168,928			206,379
Cash flows from investing activities:
Payments for property, plant and equipment	(273,672		)	(389,568		)
Proceeds from sale of property, plant and equipment	8,247			603
Proceeds from insurance recovery for property, plant and equipment	1,538			—
Other investing activities	2,864			2,647
Net cash used in investing activities	(261,023		)	(386,318		)
Cash flows from financing activities:
Proceeds from revolving credit facilities	85,000			—
Payments of revolving credit facilities	(5,000		)	—
Proceeds from short-term debt	29,781			7,264
Payments of short-term debt	(25,548		)	(31,546		)
Proceeds from issuance of long-term debt	614,375			64,000
Payments of long-term debt	(732,178		)	(77,015		)
Payments of finance lease obligations	(2,746		)	(1,689		)
Other financing activities	(3,865		)	492
Net cash used in financing activities	(40,181		)	(38,494		)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash	1,131			1,347
Net decrease in cash, cash equivalents and restricted cash	(131,145		)	(217,086		)
Cash, cash equivalents and restricted cash, beginning of period	688,051			602,851
Cash, cash equivalents and restricted cash, end of period	$	556,906		$	385,765
Non-cash investing and financing activities:
Property, plant and equipment included in capital expenditures payable	$	135,126		$	239,460
Right of use assets acquired through finance lease liabilities	2,304			6,477
Right of use assets acquired through operating lease liabilities	21,238			—

The accompanying notes are an integral part of these statements.

- 7-

Table of Contents

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Interim Financial Statements

Basis of Presentation. The Consolidated Financial Statements and related disclosures as of June 30, 2019, and for the three and six months ended June 30, 2019 and 2018, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The December 31, 2018 Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S.”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the financial statements included in our Annual Report for the year ended December 31, 2018, filed on Form 10-K with the SEC on February 22, 2019. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. Unless the context otherwise requires, all references to “Amkor,” “we,” “us,” “our” or the “company” are to Amkor Technology, Inc. and our subsidiaries.

Use of Estimates. The Consolidated Financial Statements have been prepared in conformity with U.S. GAAP, using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments.

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

Unbilled Receivables. Total unbilled receivables as of June 30, 2019 and December 31, 2018 were $88.7 million and $89.3 million, respectively.

2. New Accounting Standards

Recently Adopted Standards

In February 2016, the FASB issued 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 asset, accrued expenses and long-term operating lease liability 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.

- 8-

Table of Contents

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

3. Net Sales by Product Group and End Market

Net sales by product group consist of the following:



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)				(In thousands)
Advanced products (1)	$	432,639	$	496,241	$	855,084	$	971,993
Mainstream products (2)	462,666		569,443		935,185		1,119,010
Total net sales	$	895,305	$	1,065,684	$	1,790,269	$	2,091,003


(1)	Advanced products include flip chip and wafer-level processing and related test services.


(2)	Mainstream products include wirebond packaging and related test services.

Net sales by end market consist of the following:



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2019		2018		2019		2018
Communications (handheld devices, smartphones, tablets)	37	%	42	%	38	%	42	%
Automotive, industrial and other (driver assist, infotainment, performance, safety)	29	%	26	%	29	%	26	%
Computing (datacenter, infrastructure, PC/laptop, storage)	19	%	19	%	19	%	19	%
Consumer (connected home, set-top boxes, televisions, visual imaging, wearables)	15	%	13	%	14	%	13	%
Total net sales	100	%	100	%	100	%	100	%

4. Other Income and Expense

Other income and expense consists of the following:



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands)
Interest income	$	(1,598	)	$	(955	)	$	(3,662	)	$	(1,943	)
Foreign currency (gain) loss, net	606			(7,110		)	(1,407		)	(2,397		)
Loss on debt retirement	8,356			18			8,356			18
Other	(398		)	(2,954		)	(886		)	(3,247		)
Other (income) expense, net	$	6,966		$	(11,001	)	$	2,401		$	(7,569	)

5. Income Taxes

Income tax expense of $27.3 million for the six months ended June 30, 2019 reflects income taxes, foreign withholding taxes and minimum taxes. Income tax expense for the six months ended June 30, 2019 also includes a $14.9 million non-cash discrete tax expense primarily for the recognition of a valuation allowance for certain deferred tax assets.

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

- 9-

Table of Contents

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

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. Based on current projections of future taxable income in foreign jurisdictions, foreign deferred tax assets of $14.9 million are not expected to be realized, including certain tax credit carryforwards that are expected to expire unused.

We maintain a valuation allowance on a portion of our U.S. net deferred tax assets for deferred interest expense carryforwards, net operating loss carryforwards and foreign tax credit carryforwards that are expected to expire unused. Such valuation allowances are released as the related tax benefits are realized or when sufficient evidence exists to conclude that it is more likely than not that the deferred tax assets will be realized.

Unrecognized tax benefits represent reserves for potential tax deficiencies or reductions in tax benefits that could result from federal, state or foreign tax audits. Gross unrecognized tax benefits were $25.3 million at December 31, 2018 and $25.7 million as of June 30, 2019. All of our unrecognized tax benefits would reduce our effective tax rate, if recognized. Our unrecognized tax benefits are subject to change for effective settlement of examinations, changes in the recognition threshold of tax positions, the expiration of statutes of limitations and other factors.

We have tax returns that are open to examination in various jurisdictions for tax years 2012-2018. 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. There can be no assurance that the outcome of the examinations will be favorable. Current examinations include income tax returns in the Philippines (2012-2013), Singapore (2014-2016) and Korea (2015-2018).

6. 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 is reduced for treasury stock.

Diluted EPS is computed based on the weighted-average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period. Dilutive potential common shares include outstanding stock options and unvested restricted shares.

The following table summarizes the computation of basic and diluted EPS:



	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2019			2018		2019			2018
	(In thousands, except per share data)
Net income (loss) attributable to Amkor common stockholders	$	(9,450	)	$	32,591	$	(32,329	)	$	42,135

Weighted-average number of common shares outstanding — basic	239,508			239,351		239,461			239,283
Effect of dilutive securities:
Stock options and restricted share awards	—			453		—			522
Weighted-average number of common shares outstanding — diluted	239,508			239,804		239,461			239,805
Net income (loss) attributable to Amkor per common share:
Basic	$	(0.04	)	$	0.14	$	(0.14	)	$	0.18
Diluted	(0.04		)	0.14		(0.14		)	0.18

- 10-

Table of Contents

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

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 Three Months Ended June 30,		For the Six Months Ended June 30,
	2019	2018	2019	2018
	(In thousands)
Stock options and restricted share awards	7,618	3,644	7,618	3,524

7. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss), net of tax, consist of the following:



	Defined Benefit Pension			Foreign Currency Translation		Total
	(In thousands)
Accumulated other comprehensive income (loss) at December 31, 2018	$	2,659		$	21,153	$	23,812
Other comprehensive income (loss) before reclassifications	—			3,694		3,694
Amounts reclassified from accumulated other comprehensive income (loss)	(189		)	—		(189		)
Other comprehensive income (loss)	(189		)	3,694		3,505
Accumulated other comprehensive income (loss) at June 30, 2019	$	2,470		$	24,847	$	27,317



	Defined Benefit Pension			Foreign Currency Translation		Total
	(In thousands)
Accumulated other comprehensive income (loss) at December 31, 2017	$	6,303		$	16,216	$	22,519
Other comprehensive income (loss) before reclassifications	—			3,947		3,947
Amounts reclassified from accumulated other comprehensive income (loss)	(81		)	—		(81		)
Other comprehensive income (loss)	(81		)	3,947		3,866
Accumulated other comprehensive income (loss) at June 30, 2018	$	6,222		$	20,163	$	26,385

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

8. Factoring of Accounts Receivable

For certain accounts receivable, 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 three and six months ended June 30, 2019, we sold receivables totaling $149.1 million and $304.8 million, net of discounts and fees of $1.1 million and $2.2 million, respectively. For the three and six months ended June 30, 2018, we sold receivables totaling $203.1 million and $428.6 million, net of discounts and fees of $2.0 million and $3.8 million, respectively.

- 11-

Table of Contents

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

9. Property, Plant and Equipment

Property, plant and equipment consist of the following:



	June 30, 2019		December 31, 2018
	(In thousands)
Land	$	219,991	$	222,884
Land use rights (1)	—		26,845
Buildings and improvements	1,569,785		1,523,065
Machinery and equipment	5,266,111		5,196,930
Finance lease assets	26,414		25,874
Software and computer equipment	218,268		213,440
Furniture, fixtures and other equipment	18,877		17,204
Construction in progress	16,753		44,381