UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 6, 2012

AMKOR TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)

 
 	 	 	 	 	
DELAWARE	 	000-29472	 	23-1722724	
(State or Other Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
1900 SOUTH PRICE ROAD
CHANDLER, AZ 85286
(Address of Principal Executive Offices, including Zip Code)
(480) 821-5000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 7.01.	Regulation FD Disclosure.	
On June 7, 2012, Amkor Technology, Inc. will be participating in a non-deal investor road show in New York, NY sponsored by Citi, and on June 8, 2012, Amkor Technology, Inc. will be participating in the Credit Suisse Semi-Cap Equipment and EDA Conference, held in Boston, MA. Attached hereto as Exhibit 99.1 and incorporated by reference herein, is a copy of the materials to be presented to investors at these events. A copy of the investor presentation is available on the company’s website: www.amkor.com.
The information in this Form 8-K and the exhibit attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
 
Item 9.01.	Financial Statements and Exhibits.	
(d) Exhibits.

99.1	  	Investor Presentation dated June 2012, which is furnished (not filed) herewith.	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AMKOR TECHNOLOGY, INC.	
 	 	
By:	 	/s/ Gil C. Tily	
 	 	Gil C. Tily	
 	 	Executive Vice President, Chief Administrative
Officer and General Counsel	
Date: June 6, 2012

EXHIBIT INDEX:

Exhibit	  	Description	
 	 	
99.1	  	Investor Presentation dated June 2012	

Exhibit 99.1

Amkor Technology, Inc.
Investor Presentation
June 2012
Enabling a
Microelectronic
World®

© 2012 Amkor Technology, Inc. Amkor Confidential Information 2
Disclaimer
Forward-Looking Statement Disclaimer
All information and other statements contained in this presentation, other than statements of historical fact,
constitute forward-looking statements within the meaning of federal securities laws. These forward-looking
statements involve a number of risks, uncertainties, assumptions and other factors that could affect our
future results and cause actual results and events to differ materially from our historical and expected
results and those expressed or implied in these forward-looking statements. Our historical financial
information, and the risks and other important factors that could affect the outcome of the events set forth
in these statements and that could affect our operating results and financial condition, are contained in our
filings with the Securities and Exchange Commission, including our Form 10-K for the 2011 year and
subsequent filings. We undertake no obligation to review or update any forward-looking statements to
reflect events or circumstances occurring after this presentation.
Policy Regarding Prior Guidance and Forward-Looking Statements
From time to time we may provide financial guidance in our earnings releases and make other forwardlooking
statements. Our financial guidance and other forward-looking statements are effective only on the
date given. In accordance with our policy, we will not update, reaffirm or otherwise comment on any prior
financial guidance or other forward-looking statements in connection with this presentation. No reference
made to any prior financial guidance or other forward-looking statements in connection with this
presentation should be construed to update, reaffirm or otherwise comment on such prior financial
guidance or other forward-looking statements.

 

Key Business Highlights
One of the World’s Leading Outsourced
Semiconductor Packaging and Test Providers
Industry Pioneer and Technology Leader
Driving Innovation for Over 40 Years
In the Right Markets with the Right Customers
Strong Competitive Position
Favorable OSAT Industry Trends
© 2012 Amkor Technology, Inc. Amkor Confidential Information 3

 

Amkor Confidential Information
Key Financial Highlights
4	 	
Continued Focus on Profitable Growth and
Strong Cash Flow Generation
Managing Profitability Through Industry Cycles
Strong Balance Sheet with Debt to EBITDA of 2.6x
Industry-Leading 10% ROIC(1,3) Above 9% WACC
Well Positioned for Future Growth
$2.77 Billion
Net Sales(1)
$514 Million
EBITDA(1,2)
$78 Million
Net Income(1)
(1)	LTM 1Q12	
(2) EBITDA is defined as net income before interest expense, income tax expense and depreciation and amortization—Refer to reconciliation of Non-GAAP measures in the appendix
(3) Return on invested capital (“ROIC”) is defined as net operating profit after tax divided by average invested capital (the sum of average debt plus average equity less average cash)—Refer to the financial
calculation table in the appendix for the calculation of ROIC
© 2012 Amkor Technology, Inc.
Amkor Confidential Information

 

Growth Drivers
End
Markets
_ In the Right Markets
_ Significant Penetration in Key Devices
_ Deep Ties with the Right Customers
_ Strong OEM Presence
Technology
and R&D
_ Flip Chip Growth
_ Fine Pitch Copper Pillar Platform
_ Wafer-Level Processes
_ 3D Packaging
_ MEMS
_ Copper Wirebonding
Packaging
and Test
Industry
_ Semiconductor Unit Growth
_ IDM Outsourcing and “Fab-Lite” Model
_ Growth of Fab-Less Design Houses
_ Collaboration and Innovation
Note: Silicon interposer image courtesy of Xilinx, TSMC, and Amkor
© 2012 Amkor Technology, Inc. Amkor Confidential Information
End
Markets
_ In the Right Markets
_ Significant Penetration in Key Devices
_ Deep Ties with the Right Customers
_ Strong OEM Presence
Technology
and R&D
_ Flip Chip Growth
_ Fine Pitch Copper Pillar Platform
_ Wafer-Level Processes
_ 3D Packaging
_ MEMS
_ Copper Wirebonding
Packaging
and Test
Industry
_ Semiconductor Unit Growth
_ IDM Outsourcing and “Fab-Lite” Model
_ Growth of Fab-Less Design Houses
_ Collaboration and Innovation
5	 	
Note: Silicon interposer image courtesy of Xilinx, TSMC, and Amkor

 

In the Right Markets
© 2012 Amkor Technology, Inc. Amkor Confidential Information
Smartphone
_ Cumulative 5.1 Billion Unit Sales from
2012-2016 (22% CAGR)(1)
_ 55% of Handsets by 2016(1)
Tablet
_ Cumulative 1.3 Billion Unit Sales from
2012- 2016 (41% CAGR)(1)
_ 2016 Tablet Traffic at 1.1 Exabytes
per Month (Equal to Entire Global
Mobile Network in 2012)(2)
Consumer
Electronics
_ Gaming Consoles
_ “Always Connected” Devices
_ Digital Home
Networking
_ 2015 Global IP Traffic at 81 Exabytes
per Month (32% CAGR vs 2010)(2)
_ 2016 Global Mobile Data Traffic at 11
Exabytes per Month (18-Fold Growth
vs 2011)(2)
6	 	
(1)	Gartner. Mobile Devices Forecast Update. March 2012	
(2)	Cisco Visual Networking Index Forecast. February 2012 and February 2011	
© 2012 Amkor Technology, Inc. Amkor Confidential Information 6

 

End Market Summary
Communications Consumer Computing Networking Other 43% 24% 12% 12% 9%
Smartphone
Gaming
PC / Laptop
Server
Automotive
Tablet
Television
Hard Disc Drive
Router
Industrial
Wireless LAN
Set Top Box
Peripherals
Switch
Note: Percentages represent share of LTM 1Q12 Net Sales.
© 2012 Amkor Technology, Inc. Amkor Confidential Information
7	 	

 

Significant Penetration in Key Devices
Smartphone & Networking Gaming Console Digital Home Tablet Server
Applications Processor CPU CPU CPU
Digital Baseband GPU Signal / Image Processor ASIC / PLD
Memory Memory Memory Memory
Audio Processor Video Controller Digital Tuner Decoder I/O Control Bus
WiFi, Bluetooth, GPS, FM I/O Control Bus Audio Processors Radio WiFi, Bluetooth, GPS, FM
Power Management Radio MEMS Sensors MEMS Sensors RF / RFPA
Touch Screen Controller
© 2012 Amkor Technology, Inc. Amkor Confidential Information 8

 

Deep Ties with the Right Customers
Customer Share of 2011 Net Sales
Top 10—61%(1) / Top 25—83%
(1)	Top 10 customers represent 62% of Net Sales for LTM 1Q12	
© 2012 Amkor Technology, Inc. Amkor Confidential Information 9

 

Flip Chip & Advanced Packaging Leader
 
3	Migration to Flip Chip, 3D and Advanced Packaging Continues to Accelerate	
 
3	Driven by Strong Demand for Smartphones, Tablets, Gaming Devices, Network Infrastructure	
 
3	Enhances Device Performance, Reduces Power Consumption and Form Factors	
 
3	Higher Gross Margin and Returns Versus Wirebond	
LTM 1Q12 Flip Chip &
Advanced Packaging Revenue
($ in millions)
Source: Company Press Releases
© 2012 Amkor Technology, Inc. Amkor Confidential Information 10

 

Fine Pitch Copper Pillar Flip Chip
Provides Significant Improvement Over Solder Bump
Small and fine pitch pillars, designed for thin die and reduced package height,
high thermal and electrical performance, lower cost
Handheld, High Performance, Low Power Devices
Applications Processors, Digital Baseband, Power Management,
Networking ASICs, Digital TV ASICs
Launched in 2010, Over 125 Million Units Sold
Industry-Leading Platform Being Adopted by
Multiple Customers
Enabling Technology for 2.5D and 3D Packaging
with Through Silicon Vias
© 2012 Amkor Technology, Inc. Amkor Confidential Information
11

 

2.5D & 3D Packaging Driving Performance Improvements
Through Silicon Via (TSV) Through Silicon Via (TSV)
_ Vertical connections through die or
interposer
_ Short length, high density
_ Electrical, thermal, form factor
advantages
3D Vertical Stacking
_ Multiple die with TSVs
_ Attached to interposer or substrate
_ Small form factor
_ Applications Processors, Memory
2.5D Silicon Interposer
_ Passive silicon with TSVs
_ High density die integration
_ Large form factor
_ Network, GPU, CPU
2.5D & 3D Advantages
_ Integration of multiple heterogeneous die
_ Higher performance, wider bandwidth
_ Reduced power consumption
_ Active and passive components
_ Lower design and package costs
_ Faster time-to-market
Fine Pitch Copper Pillar
_ Interconnect for TSV-based die
stacking
_ Die-to-Die, Die-to-Interposer,
Die-to-Substrate, Interposer-to-
Substrate
© 2012 Amkor Technology, Inc. Amkor Confidential Information 12

Research & Development
Focus Areas Modeling & Simulation
Collaboration Across
Supply Chain
3D Packaging: Silicon
Interposers, TSV
Fine Pitch Copper Pillar
Wafer Level Process
Copper Wirebond
MEMS
Manufacturing Cost
Reductions
Test
Cost and Performance
Optimization
Mechanical
Electrical
Thermal
Material Optimization
Process Stability
Reliability Enhancement
Faster Time-to-Market
System Designers:
Integration, Package
Performance Requirements
and Roadmaps
Materials and Equipment
Suppliers: Engineered
Materials and Processes
Key Customers for Platform
Solutions
ver 400 Staff Worldwide. $65 Million Investment in 2011
© 2012 Amkor Technology, Inc. Amkor Confidential Information 13

 

Packaging and Test Industry Growth Drivers
14
$24B
$35B
Source: Gartner Semiconductor Assembly and Test Services, Worldwide, 1Q12 Update
Outsourced Packaging &
Test Market
_ Semiconductor Unit Growth
– 8% CAGR from 2011 to 2016(1)
_ IDM Outsourcing
– “Fab-Lite” model gaining momentum
– Some not investing in new packaging and test
technologies
– Some shedding assets to OSATs
_ Growth of Fabless Design Houses(1)
– $65 billion revenue
– 25% of total IC market in 2011
– Up from 9% in 2000
_ Collaboration and Innovation
– OSATs no longer just overflow capacity
(1)	The McClean Report 2012.	
$19B
55%
2006 2011 2016
OSAT Share of Total P&T Market
35%
40%
45%
50%
(1)	The McClean Report 2012.	
Source: Gartner Semiconductor Assembly and Test Services, Worldwide, 1Q12 Update
© 2012 Amkor Technology, Inc. Amkor Confidential Information
54%
35%
40%
45%
50%
55%
2006 2011 2016
OSAT Share of Total P&T Market
Packaging and Test Industry Growth Drivers
14

 

World-Class Manufacturing Infrastructure, Scale and Scope
LTM 1Q12 Net Sales and Packaged Units
by Factory Location
C
c
Japan
210k sf
Philippines
1.4M sf
Taiwan
850k sf
China
1.0M sf
Korea
2.3M sf
5.8 Million Sq. Ft. Manufacturing Space
54%
30%
20%
55%
11%
4%
10%
8%
5% 3%
Net Sales Units
Korea Philippines Taiwan China Japan
© 2012 Amkor Technology, Inc. Amkor Confidential Information 15

 

K5 Facility
New Factory and State-of-the-
Art R&D Center
_ Seoul, Korea Metropolitan Area
_ Flagship Site in Prime Location
Near Incheon Airport
– Improved transportation and logistics
– First class site for customers
– Attract top engineering and operations
talent
_ Advanced Packaging and Test
Services Focus
_ Tax Incentives Available for
Investment
K5
46 Acres K1
4	Acres	
K4
108 Acres
K3
3	Acres	
© 2012 Amkor Technology, Inc. Amkor Confidential Information 16

Strong Competitive Position
17
_ Industry-Leading ROIC
_ 10% ROIC Above 9% WACC
_ Consistent Ability to Generate Strong Returns Over the Cycle
_ Disciplined Capital Spending Closely Aligned with Customer Opportunities
Return on Invested Capital (ROIC)
ROIC is defined as net operating profit after tax divided by average invested capital
Capital Intensity
Capital Intensity is defined as capital additions as a percentage of net sales
*	SPIL based on purchases of property, plant and equipment as a percentage of net sales	
10%
8% 7%
11%
8% 8%
14%
10%
9%
24%
12%
10%
0%
5%
10%
15%
20%
25%
30%
2010 2011 LTM 1Q12
STATS SPIL ASE Amkor
18% 18%
19%
26%
18%
16%
23%
17%
17% 18%
16%
17%
0%
5%
10%
15%
20%
25%
30%
2010 2011 LTM 1Q12
© 2012 Amkor Technology, Inc. Amko
*	SPIL based on purchases of property, plant and equipment as a percentage of net sales	
r Confidential Information
Strong Competitive Position
17

 

Utilization Significant Gross Margin Driver
_ Flip Chip & Advanced
Packages Generate
Higher Gross Margin
Than Wirebond
_ Manage Costs in
Sync with Demand
Over Cycles
_ Other Drivers
– F/X
– Gold Prices
– ASPs
_ Flip Chip & Advanced
Packages Generate
Higher Gross Margin
Than Wirebond
_ Manage Costs in
Sync with Demand
Over Cycles
_ Other Drivers
– F/X
– Gold Prices
– ASPs
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
5%
10%
15%
20%
25%
30% Q207
Q307
Q407
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
Q111
Q211
Q311
Q411
Q112
Packaging Utilization %
Gross Margin %
Gross Margin % Packaging Utilization %
© 2012 Amkor Technology, Inc. Amkor Confidential Information 18

 

(First Quarter 2012 Summary
© 2012 Amkor Technology, Inc. Amkor Confidential Information
(1)	Free cash flow is defined as operating cash flow less purchases of property, plant and equipment	
(2) EBITDA is defined as net income before depreciation and amortization, interest expense and income tax expense—Refer to reconciliation of Non-GAAP measures in the appendix
(In millions, except per share data) 1Q 2011 4Q 2011 1Q 2012
Net Sales $665 $684 $655
Gross Margin 19% 16% 16%
Net Income $25 $25 $12
Earnings Per Diluted Share $0.10 $0.11 $0.06
Free Cash Flow(1) $6 ($1) ($65)
EBITDA(2) $133 $130 $126
Packaging Utilization 71% 73% 73%
19

Profitability Trends
Revenue and Gross Profit
($ in millions)
Selling, General & Administrative and
Research & Development
($ in millions)
$2,179
$2,939
$2,776 $2,766
$480
$664
$491 $469
22% 23%
18% 17%
0%
5%
10%
15%
20%
25%
30%
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2009 2010 2011 LTM 1Q12
Revenue Gross Profit Gross Margin %
$211
$242 $247
$239
$44 $48 $50 $52
12%
10%
11% 11%
0%
5%
10%
15%
20%
25%
30%
$-
$50
$100
$150
$200
$250
$300
2009 2010 2011 LTM 1Q12
SG&A R&D SG&A and R&D % of Rev
© 2012 Amkor Technology, Inc. Amkor Confidential Information 20

 

Free Cash Flow and EBITDA
Free Cash Flow(1)
($ in millions)
(1) Free cash flow is defined as operating cash flow less purchases of property, plant and equipment—Refer to reconciliation of Non-GAAP measures in the appendix
(2) EBITDA is defined as net income before depreciation and amortization, interest expense and income tax expense—Refer to reconciliation of Non-GAAP measures in the appendix
(3) Excludes payments relating to Korean severance obligations and the resolution of a patent license dispute of which $148 million was paid in 2009
EBITDA(2)
($ in millions)
$88
$97
$50
($21)
$148
2009 2010 2011 LTM 1Q12
$236 (3)
$547
$676
$521 $514
2009 2010 2011 LTM 1Q12
© 2012 Amkor Technology, Inc. Amkor Confidential Information 21

 

Capital Additions and Capital Intensity
Capital Intensity
Capital Intensity is defined as capital additions as a percentage of net sales ($ in millions)
LTM 1Q12 Capital Additions
Operating Cash Flow and CapEx
($ in millions)
56%
27%
17%
Packaging
Test
Infrastructure /
R&D
$262
$543
$517
$453
$174
$446
$467
$471.5 4
1.2
1.1
1.0
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
$-
$100
$200
$300
$400
$500
$600
2009 2010 2011 LTM 1Q12
Oper. Cash Flow/CapEx
Oper. Cash Flow and CapEx
Oper. Cash Flow CapEx Cash Paid Oper. CF/Cash CapEx
$198
$505
$453 $472
9%
17%
16%
17%
0%
5%
10%
15%
20%
$-
$100
$200
$300
$400
$500
$600
2009 2010 2011 LTM 1Q12 2012
Guidance
Capital Additions Capital Intensity %
Around
$550(1)
(1)	Excludes K5 Facility investment of approximately $100 million	
_ Increased 2012 Capital Additions From $300
Million to $550 Million to Largely Support
Second Half Demand for Smartphones and
Tablets from Major Customers
_ K5 Facility
– $350 million for land and buildings over 3 to 4 years
– $30 million cash paid in 2012, $70 million paid in 2013
– $100 million paid in 2012 and 2013 accrues in 2012
(incremental to $550 million previously announced)
– Construction commences in 2014
– Operations commence in 2015 or 2016
© 2012 Amkor Technology, Inc. Amkor Confidential Information 22

 

Credit Profile
Total Debt, Net Debt and Cash Balance
_ Debt Reductions 2005 to LTM 1Q12
– Total Debt Down $0.8 Billion
– Net Debt Down $1.0 Billion
Debt/EBITDA and Net Debt/EBITDA EBIT and Interest Expense
($ in millions)
$1.4 $1.4 $1.3 $1.4
$1.0
$1.0 $0.9
$1.0
$395 $405
$435
$381
$-
$100
$200
$300
$400
$500
$-
$0.5
$1.0
$1.5
$2.0
2009 2010 2011 LTM 1Q12
Cash Balance ($ in millions)
Debt ($ in billions)
Total Debt Net Debt Cash Balance
2.6
2.0
2.6 2.6
1.9
1.4
1.8
1.9
2009 2010 2011 LTM 1Q12
Debt/EBITDA Net Debt/EBITDA
$242
$352
$186 $173
$115
$101
$87 $88
2.1
3.5
2.1
2.0
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
$-
$100
$200
$300
$400
2009 2010 2011 LTM 1Q12
EBIT/Interest Expense
EBIT and Interest Expense
EBIT Interest Expense EBIT/Int. Exp.
© 2012 Amkor Technology, Inc. Amkor Confidential Information 23

 

$25022
$78
$132
$126
$2
$345
$400
$250
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Term Loans Senior Notes Convertible Notes
24
Debt Maturities
Maturity Profile as of March 31, 2012: $1,355 Million
($ in millions)
Balance First Call Call
Callable Notes Due ($M) Date Price
7.375% Senior Notes May 2018 $345 May 2014 103.688
6.625% Senior Notes June 2021 $400 June 2015 104.969
$382
© 2012 Amkor Technology, Inc. Amkor Confidential Information
$22
$78
$132
$126
$2
$345
$400
$250
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Term Loans Senior Notes Convertible Notes
24

 

© 2012 Amkor Technology, Inc. Amkor Confidential Information 25
Appendix

 

Financial Reconciliation Tables
*	See discussion of Non-GAAP measures on following page	
($ in millions) 2009 2010 2011 LTM 1Q12 1Q11 4Q11 1Q12
Net Cash Provided by Operating Activities $262 $543 $517 $453 $120 $141 $56
Less: Purchases of Property, Plant and Equipment (174 ) (446) (467) (474) (114) (142) (121)
Free Cash Flow* $88 $97 $50 ($21) $6 ($1) ($65)
Property, Plant and Equipment Additions
(Capital Additions) $198 $505 $453 $472 $105 $128 $124
Less: Net Change in Related Accounts
Payable and Deposits (24) (59) 14 2 9 14 ( 3)
Purchases of Property, Plant and Equipment $174 $446 467 474 $114 $142 $121
Net Income $156 $232 $92 $78 $25 $25 $12
Plus: Interest Expense (Including Related Party) 115 101 87 88 22 22 22
Plus: Income Tax Expense (Benefit) (29) 19 7 7 3 (3) 3
EBIT* 242 352 186 173 50 44 37
Plus: Depreciation & Amortization 305 324 335 341 83 86 89
EBITDA* $547 $676 $521 $514 $133 $130 $126
© 2012 Amkor Technology, Inc. Amkor Confidential Information 26
*	See discussion of Non-GAAP measures on following page	

© 2012 Amkor Technology, Inc. Amkor Confidential Information 27
Financial Reconciliation Tables
We define free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. Free cash flow is not defined by U.S. GAAP. We believe free
cash flow to be relevant and useful information to our investors because it provides them with additional information in assessing our liquidity, capital resources and financial operating
results. Our management uses free cash flow in evaluating our liquidity, our ability to service debt and our ability to fund capital additions. However, free cash flow has certain
limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other, non-discretionary expenditures, such as mandatory debt
service, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. This measure should be considered
in addition to, and not as a substitute for, or superior to, other measures of liquidity or financial performance prepared in accordance with U.S. GAAP, such as net cash provided by
operating activities. Furthermore, our definition of free cash flow may not be comparable to similarly titled measures reported by other companies.
We define EBIT as net income before interest expense and income tax expense. We define EBITDA as EBIT before depreciation and amortization. EBIT and EBITDA are not defined
by generally accepted accounting principles. However, we believe EBIT and EBITDA to be relevant and useful information to our investors because they provide investors with
additional information in assessing our financial operating results. Our management uses EBIT and EBITDA in evaluating our operating performance, our ability to service debt and our
ability to fund capital additions. However, these measures should be considered in addition to, and not as a substitute for, or superior to, operating income, net income or other
measures of financial performance prepared in accordance with generally accepted accounting principles, and our definitions of EBIT and EBITDA may not be comparable to similarly
titled measures reported by other companies.
We define return on invested capital (“ROIC”) as net operating profit after tax divided by average invested capital (the sum of average debt plus average equity less average cash).
ROIC is not defined by U.S. GAAP. However, we believe ROIC is relevant and useful information for our investors and management in evaluating whether our capital investments are
generating stockholder value.
($ in millions) LTM 1Q12
Operating Income $178
Income Tax Expense (7)
Net Operating Profit After Tax (NOPAT) $171
Average Debt $1,299
Plus: Average Equity 728
Less: Average Cash (387)
Average Invested Capital $1,640
Return on Invested Capital (ROIC) 10%
(NOPAT / Average Invested Capital)