o
|
REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the fiscal year ended December 31,
2008
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from ________________ to
________________
|
o
|
SHELL
COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
|
Date
of event requiring this shell company report
________________
|
AU
OPTRONICS CORP.
(Translation
of Registrant’s name into English)
|
TAIWAN,
REPUBLIC OF CHINA
(Jurisdiction
of incorporation or organization)
|
Title
of each class
|
Name
of each exchange on which registered
|
|
Common
Shares of par value NT$10.00 each
|
The
New York Stock Exchange, Inc.*
|
|
*
|
Not for trading, but only in
connection with the listing on the New York Stock Exchange, Inc. of
American Depositary Shares representing such Common
Shares
|
Large
accelerated filer x Accelerated
filer o Non-accelerated
filer o
|
U.S.
GAAP o International
Financial Reporting Standards as issued by the International Accounting
Standards Board o
Other x
|
Year
Ended and As of December 31,
|
||||||||||||||||||||||||
2004
|
2005
|
2006
|
2007
|
2008
|
||||||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||||||||
(in
millions, except percentages and per share and per ADS
data)
|
||||||||||||||||||||||||
Consolidated
Statement of Income Data:
|
||||||||||||||||||||||||
ROC
GAAP
|
||||||||||||||||||||||||
Net
sales
|
168,111.6 | 217,388.4 | 293,106.8 | 480,183.6 | 423,928.2 | 12,940.4 | ||||||||||||||||||
Gross
profit
|
39,643.3 | 29,848.0 | 29,850.3 | 86,178.2 | 55,327.9 | 1,688.9 | ||||||||||||||||||
Operating
expenses
|
11,036.0 | 12,859.3 | 15,634.0 | 22,903.5 | 24,735.6 | 755.1 | ||||||||||||||||||
Operating
income
|
28,607.3 | 16,988.7 | 14,216.3 | 63,274.8 | 30,592.3 | 933.8 | ||||||||||||||||||
Earnings
before income tax and cumulative effect of changes in accounting
principles
|
28,024.2 | 16,094.6 | 10,200.3 | 58,563.8 | 26,270.9 | 801.9 | ||||||||||||||||||
Income
tax expense
|
(61.3 | ) | (473.4 | ) | (1,068.3 | ) | (2,087.9 | ) | (4,629.1 | ) | (141.3 | ) | ||||||||||||
Cumulative effect of
changes in accounting principle(1)
|
— | — | (38.6 | ) | — | — | — | |||||||||||||||||
Net
income
|
27,962.9 | 15,621.2 | 9,093.4 | 56,475.9 | 21,641.8 | 660.6 | ||||||||||||||||||
Weighted
average shares outstanding—Basic
|
6,185.5 | 6,545.7 | 7,182.4 | 8,441.9 | 8,505.2 | 8,505.2 | ||||||||||||||||||
Weighted
average shares outstanding—Diluted
|
6,185.5 | 6,545.7 | 7,292.5 | 8,850.3 | 8,845.8 | 8,845.8 |
Year
Ended and As of December 31,
|
||||||||||||||||||||||||
2004
|
2005
|
2006
|
2007
|
2008
|
||||||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||||||||
(in
millions, except percentages and per share and per ADS
data)
|
||||||||||||||||||||||||
Consolidated
Statement of Income Data:
|
||||||||||||||||||||||||
ROC
GAAP (continued):
|
||||||||||||||||||||||||
Earnings
per share—Basic
|
4.52 | 2.39 | 1.27 | 6.68 | 2.50 | 0.08 | ||||||||||||||||||
Earnings
per share—Diluted
|
4.52 | 2.39 | 1.18 | 6.35 | 2.41 | 0.07 | ||||||||||||||||||
Earnings
per ADS equivalent—Basic
|
45.21 | 23.87 | 12.67 | 66.83 | 25.01 | 0.76 | ||||||||||||||||||
Earnings
per ADS equivalent—Diluted
|
45.21 | 23.87 | 11.76 | 63.49 | 24.09 | 0.74 | ||||||||||||||||||
Consolidated
Balance Sheet Data:
|
||||||||||||||||||||||||
ROC
GAAP
|
||||||||||||||||||||||||
Current
assets
|
59,747.3 | 95,841.0 | 152,771.4 | 217,878.3 | 146,293.1 | 4,465.6 | ||||||||||||||||||
Property,
plant and equipment
|
159,743.1 | 221,126.8 | 381,550.7 | 363,835.1 | 389,348.3 | 11,884.9 | ||||||||||||||||||
Goodwill
and intangible assets
|
1,062.7 | 2,483.3 | 20,142.8 | 19,554.4 | 15,548.1 | 474.6 | ||||||||||||||||||
Total
assets
|
230,694.4 | 329,796.3 | 578,157.9 | 617,459.2 | 566,935.6 | 17,305.7 | ||||||||||||||||||
Current
liabilities
|
53,600.8 | 89,858.1 | 167,345.6 | 174,520.9 | 152,484.7 | 4,654.6 | ||||||||||||||||||
Long-term
liabilities
|
46,334.0 | 83,940.3 | 179,716.0 | 142,097.2 | 115,170.9 | 3,515.6 | ||||||||||||||||||
Total
liabilities
|
100,128.8 | 173,976.8 | 347,081.6 | 316,639.4 | 267,676.9 | 8,170.8 | ||||||||||||||||||
Capital
stock
|
49,580.4 | 58,305.5 | 75,734.0 | 78,177.1 | 85,057.2 | 2,596.4 | ||||||||||||||||||
Total
stockholders’ equity
|
130,565.6 | 155,819.5 | 231,076.3 | 300,819.9 | 299,258.7 | 9,134.9 | ||||||||||||||||||
Other
Financial Data:
|
||||||||||||||||||||||||
ROC
GAAP
|
||||||||||||||||||||||||
Gross margin(2)
|
23.6 | % | 13.7 | % | 10.2 | % | 17.9 | % | 13.1 | % | 13.1 | % | ||||||||||||
Operating
margin(3)
|
17.0 | % | 7.8 | % | 4.9 | % | 13.2 | % | 7.2 | % | 7.2 | % | ||||||||||||
Net margin(4)
|
16.6 | % | 7.2 | % | 3.1 | % | 11.8 | % | 5.1 | % | 5.1 | % | ||||||||||||
Capital
expenditures
|
81,868.7 | 80,652.3 | 87,246.7 | 65,136.7 | 98,355.2 | 3,002.3 | ||||||||||||||||||
Depreciation
and amortization
|
25,309.3 | 34,493.2 | 52,760.2 | 81,705.6 | 81,188.4 | 2,478.3 | ||||||||||||||||||
Cash
dividend paid
|
5,208.3 | 5,935.2 | 1,749.2 | 1,514.8 | 19,670.6 | 600.4 | ||||||||||||||||||
Cash
flows from operating activities
|
49,393.6 | 48,006.0 | 68,526.7 | 156,926.9 | 132,057.5 | 4,031.1 | ||||||||||||||||||
Cash
flows from investing activities
|
(87,010.2 | ) | (82,456.2 | ) | (83,300.6 | ) | (66,123.1 | ) | (101,257.4 | ) | (3,090.9 | ) | ||||||||||||
Cash
flows from financing activities
|
37,615.2 | 43,097.3 | 32,550.8 | (44,816.6 | ) | (37,435.6 | ) | (1,142.7 | ) |
Year
Ended and As of December 31,
|
||||||||||||||||||||||||
2004
|
2005
|
2006
|
2007
|
2008
|
||||||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||||||||
(in
millions, except percentages and per common share and per ADS
data)
|
||||||||||||||||||||||||
Consolidated
Statement of Income Data:
|
||||||||||||||||||||||||
US
GAAP
|
||||||||||||||||||||||||
Net
sales
|
168,111.6 | 217,388.4 | 293,106.8 | 480,184.3 | 423,928.2 | 12,940.4 | ||||||||||||||||||
Gross
profit
|
32,855.6 | 22,126.5 | 23,372.0 | 73,179.3 | 42,959.9 | 1,311.4 | ||||||||||||||||||
Operating
expenses
|
12,686.8 | 12,642.7 | 15,819.3 | 21,328.3 | 22,811.7 | 696.3 | ||||||||||||||||||
Operating
income
|
20,168.8 | 9,483.8 | 7,552.6 | 51,851.0 | 20,148.1 | 615.0 | ||||||||||||||||||
Earnings
before income tax, extraordinary item and minority
interests
|
18,575.9 | 8,837.1 | 2,222.4 | 48,434.3 | 16,086.2 | 491.0 | ||||||||||||||||||
Income
tax expense
|
(463.4 | ) | (473.4 | ) | (1,059.2 | ) | (3,053.1 | ) | (2,579.6 | ) | (78.7 | ) | ||||||||||||
Minority
interests in (loss) income
|
– | (5.8 | ) | (10.0 | ) | 25.7 | 416.9 | 12.7 | ||||||||||||||||
Extraordinary
item(5)
|
– | 308.7 | – | – | – | – | ||||||||||||||||||
Net
income
|
18,112.5 | 8,678.2 | 1,173.2 | 45,355.5 | 13,089.7 | 399.6 | ||||||||||||||||||
Weighted
average shares outstanding—Basic
|
5,729.5 | 6,171.5 | 6,882.6 | 8,164.7 | 8,356.0 | 8,356.0 | ||||||||||||||||||
Weighted
average shares outstanding—Diluted
|
5,729.5 | 6,171.5 | 6,882.6 | 8,561.4 | 8,560.8 | 8,560.8 | ||||||||||||||||||
Earnings
per share—Basic:
|
||||||||||||||||||||||||
Income
before extraordinary item
|
3.16 | 1.36 | 0.17 | 5.56 | 1.57 | 0.05 | ||||||||||||||||||
Extraordinary
item
|
|
0.05 | – | – | – | – | ||||||||||||||||||
Net
income
|
3.16 | 1.41 | 0.17 | 5.56 | 1.57 | 0.05 | ||||||||||||||||||
Earnings
per share—Diluted:
|
Year
Ended and As of December 31,
|
||||||||||||||||||||||||
2004
|
2005
|
2006
|
2007
|
2008
|
||||||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||||||||
(in
millions, except percentages and per common share and per ADS
data)
|
||||||||||||||||||||||||
Consolidated
Statement of Income Data:
|
||||||||||||||||||||||||
US
GAAP (continued)
|
||||||||||||||||||||||||
Income
before extraordinary item
|
3.16 | 1.36 | 0.17 | 5.32 | 1.53 | 0.05 | ||||||||||||||||||
Extraordinary
item
|
|
0.05 | – | – | – | – | ||||||||||||||||||
Net
income
|
3.16 | 1.41 | 0.17 | 5.32 | 1.53 | 0.05 | ||||||||||||||||||
Earnings
per ADS equivalent—Basic:
|
||||||||||||||||||||||||
Income
before extraordinary item
|
31.61 | 13.56 | 1.70 | 55.55 | 15.67 | 0.48 | ||||||||||||||||||
Extraordinary
item
|
|
0.50 | – | – | – | – | ||||||||||||||||||
Net
income
|
31.61 | 14.06 | 1.70 | 55.55 | 15.67 | 0.48 | ||||||||||||||||||
Earnings
per ADS equivalent—Diluted:
|
||||||||||||||||||||||||
Income
before extraordinary item
|
31.61 | 13.56 | 1.70 | 53.22 | 15.34 | 0.47 | ||||||||||||||||||
Extraordinary
item
|
|
0.50 | – | – | – | – | ||||||||||||||||||
Net
income
|
31.61 | 14.06 | 1.70 | 53.22 | 15.34 | 0.47 | ||||||||||||||||||
Consolidated
Balance Sheet Data:
|
||||||||||||||||||||||||
US
GAAP
|
||||||||||||||||||||||||
Current
assets
|
58,254.5 | 93,469.8 | 150,855.5 | 215,929.0 | 145,522.3 | 4,442.1 | ||||||||||||||||||
Property,
plant and equipment
|
159,185.3 | 220,974.0 | 380,859.8 | 361,197.2 | 383,958.1 | 11,720.3 | ||||||||||||||||||
Goodwill
and intangible assets
|
16,207.4 | 16,578.5 | 33,188.5 | 30,334.7 | 26,399.4 | 805.8 | ||||||||||||||||||
Total
assets
|
245,114.0 | 342,809.3 | 588,431.5 | 623,655.0 | 568,985.6 | 17,368.3 | ||||||||||||||||||
Current
liabilities
|
55,444.9 | 91,288.0 | 169,543.8 | 180,765.1 | 152,647.2 | 4,659.6 | ||||||||||||||||||
Long-term
liabilities
|
46,983.5 | 84,485.1 | 179,927.6 | 142,182.1 | 115,209.3 | 3,516.8 | ||||||||||||||||||
Total
liabilities
|
102,428.4 | 175,773.1 | 349,471.4 | 322,947.2 | 267,856.5 | 8,176.3 | ||||||||||||||||||
Total
stockholders’ equity
|
142,685.6 | 166,918.9 | 238,618.1 | 291,865.8 | 293,391.9 | 8,955.8 | ||||||||||||||||||
Other
Financial Data:
|
||||||||||||||||||||||||
US
GAAP
|
||||||||||||||||||||||||
Gross margin(2)
|
19.5 | % | 10.2 | % | 8.0 | % | 15.2 | % | 10.1 | % | 10.1 | % | ||||||||||||
Operating
margin(3)
|
12.0 | % | 4.4 | % | 2.6 | % | 10.8 | % | 4.8 | % | 4.8 | % | ||||||||||||
Net margin(4)
|
10.8 | % | 4.0 | % | 0.4 | % | 9.4 | % | 3.1 | % | 3.1 | % | ||||||||||||
Capital
expenditures
|
82,011.1 | 80,801.0 | 87,408.9 | 65,300.5 | 98,330.6 | 3,001.5 | ||||||||||||||||||
Depreciation
and amortization
|
26,358.0 | 36,067.1 | 54,940.0 | 84,984.5 | 83,680.4 | 2,554.3 | ||||||||||||||||||
Cash
flows from operating activities
|
48,943.8 | 46,951.9 | 67,955.3 | 156,942.2 | 132,044.2 | 4,030.7 | ||||||||||||||||||
Cash
flows from investing activities
|
(88,001.0 | ) | (81,428.1 | ) | (83,130.7 | ) | (66,313.7 | ) | (101,242.4 | ) | (3,090.4 | ) | ||||||||||||
Cash
flows from financing activities
|
38,066.2 | 43,783.9 | 32,951.7 | (44,816.6 | ) | (37,473.2 | ) | (1,143.9 | ) |
(1)
|
Represents
the cumulative effect of our adoption of Republic of China Statement of
Financial Accounting Standards (“ROC SFAS”) No. 34 “Financial Instruments:
Recognition and Measurement” on January 1,
2006.
|
(2)
|
Gross
margin is calculated by dividing gross profit by net
sales.
|
(3)
|
Operating
margin is calculated by dividing operating income by net
sales.
|
(4)
|
Net
margin is calculated by dividing net income by net
sales.
|
(5)
|
Represents
the proportionate share of extraordinary gain reported by equity-method
investee in 2005.
|
NT
Dollars per U.S. Dollar Noon Buying Rate
|
||||||||||||||||
Average
|
High
|
Low
|
Period-End
|
|||||||||||||
(of
month end rates for years)
|
||||||||||||||||
2004
|
$ | NT33.27 | $ | NT34.16 | $ | NT31.74 | $ | NT31.74 | ||||||||
2005
|
32.13 | 33.77 | 30.65 | 32.80 | ||||||||||||
2006
|
32.51 | 33.31 | 31.28 | 32.59 | ||||||||||||
2007
|
32.85 | 33.41 | 32.26 | 32.43 | ||||||||||||
2008
|
31.52 | 33.55 | 29.99 | 32.76 | ||||||||||||
November
|
33.10 | 33.42 | 32.77 | 33.29 | ||||||||||||
December
|
33.11 | 33.55 | 32.45 | 32.76 | ||||||||||||
2009:
(through May 22)
|
33.72
|
35.21
|
32.55
|
32.55
|
||||||||||||
January
|
33.37 | 33.70 | 32.82 | 33.70 | ||||||||||||
February
|
34.24 | 35.00 | 33.61 | 35.00 | ||||||||||||
March
|
34.30 | 35.21 | 33.75 | 33.87 | ||||||||||||
April
|
33.60 | 33.88 | 32.99 | 33.06 | ||||||||||||
May
(through May 22)
|
32.93
|
33.14
|
32.55
|
32.55
|
·
|
Our ability to develop and
introduce new products to meet customers’ needs in a timely manner.
The inability to develop or introduce new products in a timely manner may
hurt our competitive position because customers may choose to source more
advanced products from competitors.
|
·
|
Our ability to develop or
acquire and implement new manufacturing processes and product
technologies. If we are unable to successfully implement new
manufacturing processes and product technologies in a timely manner, our
competitors may seize new opportunities in new
markets.
|
·
|
Our ability to control our
fixed and variable costs and operating expenses. Increased fixed
and variable costs and operating expenses may reduce our margins and
adversely affect our results of
operations.
|
·
|
Changes in our product mix or
those of our customers. Our results of operations may fluctuate if
we are unable to manage our product mix to meet our customers’ demand in a
timely manner.
|
·
|
Our ability to obtain raw
materials and components at acceptable prices and in a timely
manner. A shortage in raw materials and components could result in
increased raw materials and components costs and put downward pressure on
gross margins as well as cause delays to our production and delivery
schedules, which may result in the loss of customers and
revenues.
|
·
|
Lower than expected growth in
demand for TFT-LCD panels resulting in oversupply in the market.
When oversupply conditions occur, we may reduce the price of our panels to
maintain high capacity utilization rates or lower our utilization
rate.
|
·
|
Our ability to obtain adequate
external financing on satisfactory terms. Our business
is capital-intensive and if we are unable to obtain adequate external
financing on satisfactory terms, it will have a material adverse effect on
our business, results of operations and future
prospects.
|
·
|
Fines and penalties payable.
We and certain of our subsidiaries, along with various competitors
in the TFT-LCD industry, are under investigation for alleged violation of
antitrust and competition laws. Any penalties, fines or settlements made
in connection with this investigation and/or these lawsuits may have a
material adverse effect on our business, results of operations and future
prospects.
|
·
|
the
cyclical nature of both the TFT-LCD industry, including fluctuations in
average selling prices, and the markets served by our
customers;
|
·
|
the
speed at which we and our competitors expand production
capacity;
|
·
|
access
to raw materials and components, equipment, electricity, water and other
required utilities on a timely and economical
basis;
|
·
|
technological
changes;
|
·
|
the
loss of a key customer or the postponement of orders from a key
customer;
|
·
|
the
outcome of on-going and future litigation and government
investigations;
|
·
|
changes
in end-users’ spending patterns;
|
·
|
changes
to our management team;
|
·
|
the
rescheduling and cancellation of large
orders;
|
·
|
access
to funding on satisfactory terms;
|
·
|
our
customers’ adjustments in their
inventory;
|
·
|
natural
disasters, such as typhoons and earthquakes, and industrial accidents,
such as fires and power failures, as well as geo-political instability as
a result of terrorism or political or military conflicts;
and
|
·
|
changes
in general economic conditions, especially the impact of the global
financial crisis on economic
growth.
|
·
|
our
growth plan;
|
·
|
manufacturing
process and product technologies;
|
·
|
market
conditions;
|
·
|
prices
of equipment;
|
·
|
costs
of construction; and
|
·
|
interest
rates and foreign exchange rates.
|
·
|
price;
|
·
|
product
performance features and quality;
|
·
|
customer
service, including product design
support;
|
·
|
ability
to reduce production cost;
|
·
|
ability
to provide sufficient quantity of products to fulfill customers’
needs;
|
·
|
research
and development;
|
·
|
time-to-market;
and
|
·
|
access
to capital.
|
•
|
problems
integrating the acquired operations, technologies or products into our
existing business and products;
|
•
|
diversion
of management’s time and attention from our core
business;
|
•
|
adverse
effects on our existing business relationships with
customers;
|
•
|
need
for financial resources above our planned investment
levels;
|
•
|
failures
in recognizing anticipated
synergies;
|
•
|
difficulties
in retaining business relationships with suppliers and customers of the
acquired company;
|
•
|
risks
associated with entering markets in which we lack
experience;
|
•
|
potential
loss of key employees of the acquired company;
and
|
•
|
potential
write-offs of acquired assets.
|
·
|
the
level of contaminants in the manufacturing
environment;
|
·
|
human
error;
|
·
|
equipment
malfunction;
|
·
|
use
of substandard raw materials and components;
and
|
·
|
inadequate
sample testing.
|
•
|
discontinue
using disputed manufacturing process
technologies;
|
•
|
pay
substantial monetary damages;
|
•
|
seek
to develop non-infringing technologies, which may not be feasible;
or
|
|
•
|
seek
to acquire licenses to the infringed technology, which may not be
available on commercially reasonable terms, if at
all.
|
·
|
Computer
products, which typically utilize display panels ranging from 8.9 inches
to larger than 24 inches, primarily for use in notebook computers and
desktop monitors.
|
·
|
Consumer
electronics products, which typically utilize display panels ranging from
1.2 inches to 10.4 inches or above for use in products such as mobile
phones, digital photo frames, digital still cameras, portable
navigation display, portable DVD players, digital camcorders, automobile
display, amusement and printer
displays.
|
·
|
LCD
television, which typically utilizes display panels with panel size of 19
inches to 65 inches. We commenced the production of display panels for LCD
television in the fourth quarter of
2002.
|
·
|
Industrial
display, which typically utilizes display panels with panel size of 5.7
inches to 65 inches primarily for use in automatic teller machines, point
of sale systems, kiosks, industrial PCs, marine and aviation electronics,
game machines, medical equipment, factory automation systems, e-Signage
and public information displays.
|
Year
Ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
(Panels
in thousands)
|
||||||||||||
Panels
for Computer Products
|
||||||||||||
Panels
for notebook computers
|
14,149.1 | 27,478.9 | 32,881.6 | |||||||||
Panels
for desktop monitors
|
23,167.4 | 30,715.0 | 28,492.0 | |||||||||
Total
panels for computer products
|
37,316.5 | 58,193.9 | 61,373.6 | |||||||||
Panels
for Consumer Electronics Products
|
79,451.0 | 144,087.2 | 184,311.5 | |||||||||
Panels
for LCD Television
|
9,361.4 | 18,875.9 | 18,754.1 | |||||||||
Panels
for Industrial Display
|
1,806.6 | 2,813.3 | 3,244.0 | |||||||||
Total
|
127,935.5 | 223,970.3 | 267,683.2 |
Year
Ended December 31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Panels
for Computer Products
|
||||||||||||||||
Panels
for notebook computers
|
46,896.8 | 89,030.3 | 81,100.6 | 2,475.6 | ||||||||||||
Panels
for desktop monitors
|
100,575.8 | 133,278.3 | 93,096.9 | 2,841.8 | ||||||||||||
Total panels for computer
products
|
147,472.6 | 222,308.6 | 174,197.5 | 5,317.4 | ||||||||||||
Panels
for Consumer Electronics Products
|
31,290.6 | 43,023.2 | 42,598.8 | 1,300.3 | ||||||||||||
Panels
for LCD Television
|
104,794.2 | 200,572.9 | 188,161.5 | 5,743.6 | ||||||||||||
Panels
for Industrial Display
|
7,861.8 | 11,988.4 | 13,664.9 | 417.1 | ||||||||||||
Other(1)
|
1,687.6 | 2,290.5 | 5,305.5 | 162.0 | ||||||||||||
Total
|
293,106.8 | 480,183.6 | 423,928.2 | 12,940.4 |
(1)
|
Includes
revenues generated from sales of raw materials and components and other
TFT-LCD panel products, and from service
charges.
|
Year
Ended December 31,
|
||||||||||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||||||||||
Region
|
Net
Sales
|
%
|
Net
Sales
|
%
|
Net
Sales
|
%
|
||||||||||||||||||
(in
NT$ millions, except percentages)
|
||||||||||||||||||||||||
Taiwan
|
89,841 | 30.7 | % | 174,273 | 36.3 | % | 184,895 | 43.6 | % | |||||||||||||||
Japan
|
18,170 | 6.2 | % | 36,698 | 7.6 | % | 11,835 | 2.8 | % | |||||||||||||||
Asia(1)
|
136,293 | 46.5 | % | 192,878 | 40.2 | % | 160,744 | 37.9 | % | |||||||||||||||
Europe
|
30,106 | 10.3 | % | 43,372 | 9.0 | % | 36,450 | 8.6 | % | |||||||||||||||
United
States
|
13,853 | 4.7 | % | 26,468 | 5.5 | % | 26,071 | 6.2 | % | |||||||||||||||
Others
|
4,844 | 1.6 | % | 6,495 | 1.4 | % | 3,933 | 0.9 | % | |||||||||||||||
Total
|
293,107 | 100.0 | % | 480,184 | 100.0 | % | 423,928 | 100.0 | % |
(1)
|
Excludes
Japan and Taiwan.
|
Glass
Substrates
|
Liquid
Crystals
|
Color
Filters
|
Polarizer
|
Backlight
Units
|
Driver
Integrated Circuits
|
|||||
Asahi
Glass
|
Chisso
Corporation
|
Cando
Corporation(1)
|
Daxon
Technology(3)
|
Coretronic
|
Nippon
Electric Company
|
|||||
Corning
Taiwan
|
DIC
Corporation
|
Dai
Nippon Printing
|
Nitto
Denko
|
Darwin
Precisions(5)
|
Novatek
|
|||||
Nippon
Electric Glass
|
Merck
|
Toppan
CFI(2)
|
Sumika
|
Forhouse(7)
|
Orise
|
|||||
Radiant
Opto-Electronics
|
Raydium
Semiconductor(4)
|
|||||||||
Taiwan
Nano Electro-Optical(6)
|
(1)
|
Cando
Corporation has been our investee since November 2003. See
“Item 7.B. Related Party
Transactions.”
|
(2)
|
Toppan
CFI (Taiwan) Co. Ltd (“Toppan CFI”) has been our consolidated subsidiary
since March 2007.
|
(3)
|
Daxon
Technology is a subsidiary of one of our major shareholders, Qisda. See
“Item 7.B. Related Party
Transactions.”
|
(4)
|
We
reduced our indirect ownership in Raydium Semiconductor Corporation to
less than 50% in January 2006. As a result, Raydium Semiconductor is no
longer a consolidated subsidiary.
|
(5)
|
Darwin
Precisions (Xiamen) Corp. and Darwin Precisions (Suzhou) Corp. are our
consolidated subsidiaries and also our backlight units
suppliers.
|
(6)
|
Taiwan
Nano Electro-Optical is our
investee.
|
(7)
|
Forhouse
is our investee.
|
·
|
LG
Display Co., Ltd. (“LG Display”) and Samsung, in
Korea;
|
·
|
Chi
Mei Optoelectronics, Chunghwa Picture Tubes, Hannstar Display, Innolux
Display, Toppoly Optoelectronics, Wintek Corporation, Giantplus Technology
and Prime View International Co., Ltd. in
Taiwan;
|
·
|
Sharp,
Toshiba Matsushita Display Technology, IPS Alpha Technology, Ltd. and
Tottori Sanyo in Japan; and
|
·
|
Shanghai
SVA NEC Liquid Crystal Display Co., Ltd., BOE Technology Group Co., Ltd.,
IVO Corporation, Century Corporation Co., Ltd. China, Shanghai Tianma
Micro Electronics Co., Ltd., and Shenzhen Tianma Micro Electronics Co.,
Ltd. in the PRC.
|
·
|
price,
based in large part on the ability to ramp-up lower cost, “next
generation” production facilities before
competitors;
|
·
|
product
features and quality;
|
·
|
customer
service, including product design
support;
|
·
|
ability
to keep production costs low by maintaining high yield and operating at
full capacity;
|
·
|
ability
to provide sufficient quantity of products to meet customer
demand;
|
·
|
quality
of the research and development
team;
|
·
|
time-to-market;
|
·
|
superior
logistics; and
|
·
|
access
to capital.
|
Subsidiary
|
Main Activities
|
Jurisdiction of
Incorporation
|
Total Paid-in
Capital
|
Percentage of
Our Ownership
Interest
|
||||
(in
millions)
|
||||||||
AU
Optronics (L) Corp.
|
Holding
company
|
Malaysia
|
US$543.1
|
100%
|
||||
AU
Optronics Corporation America
|
Sales
support in the United States
|
United States
|
US$1.0
|
100%(1)
|
||||
AU
Optronics Corporation Japan
|
Sales
support in Japan
|
Japan
|
JPY40.0
|
100%(1)
|
||||
AU
Optronics Europe B.V.
|
Sales
support in Europe
|
Netherlands
|
EUR0.05
|
100%(1)
|
||||
AU
Optronics Korea Ltd.
|
Sales
support in South Korea
|
South
Korea
|
KRW173.1
|
100%(1)
|
||||
AU
Optronics (Shanghai) Corp.
|
Sales
support in the PRC
|
PRC
|
RMB21.8
|
100%(1)
|
||||
AU
Optronics (Xiamen) Corp.
|
Assembly
of TFT-LCD modules in the PRC
|
PRC
|
RMB1,361.8
|
100%(1)
|
||||
AU
Optronics (Suzhou) Corp.
|
Assembly
of TFT-LCD modules in the PRC
|
PRC
|
RMB1,967.3
|
100%(1)
|
||||
AU
Optronics Singapore Pte. Ltd.
|
Sales
support in South Asia
|
Singapore
|
SGD0.1
|
100%(1)
|
Subsidiary
|
Main Activities
|
Jurisdiction of
Incorporation
|
Total Paid-in
Capital
|
Percentage of
Our Ownership
Interest
|
||||
(in
millions)
|
||||||||
AU
Optronics (Czech) s.r.o.
|
Repair
center in Czech Republic and assembly of TFT-LCD modules and TV
set
|
Czech
Republic
|
CZK300.0
|
100%(1)
|
||||
Tech-Well
(Shanghai) Display Co.
|
Assembly
of TFT-LCD modules in the PRC
|
PRC
|
RMB867.0
|
100%(1)
|
||||
AU
Optronics (Slovakia) s.r.o.
|
Assembly
of TFT-LCD modules in Slovakia and manufacturing and sale of related
parts(7)
|
Slovakia
|
EUR15.0
|
100%
|
||||
BriView
Electronics Corp.
|
Manufacturing
and sale of liquid crystal products and related parts
|
PRC
|
RMB41.0
|
100%
|
||||
Darwin
Precisions (L) Corp.
|
Holding
company
|
Malaysia
|
US$85.0
|
73.53%(1)
|
||||
Darwin
Precisions (Hong Kong) Limited
|
Holding
company
|
Hong
Kong
|
HK$153.9
|
73.53%(2)
|
||||
Darwin
Precisions (Suzhou) Corp.
|
Manufacturing
and assembly of backlight modules and related components in the
PRC
|
PRC
|
RMB120.7
|
73.53%(3)
|
||||
Darwin
Precisions (Xiamen) Corp.
|
Manufacturing
and assembly of backlight modules and related components in the
PRC
|
PRC
|
RMB369.3
|
73.53%(3)
|
||||
Konly
Venture Corp.
|
Venture
capital investment
|
ROC
|
NT$2,000.0
|
100%
|
||||
Ronly
Venture Corp.
(4)
|
Venture
capital investment
|
ROC
|
NT$1,500.0
|
100%
|
||||
Lextar
Electronics Corp.
|
Manufacturing
and sale of LED products
|
ROC
|
NT$2,000.0
|
76.98%
|
||||
Darwin
Precisions Corp.
|
Manufacturing
and sale of backlight modules
|
ROC
|
NT$1,320.0
|
66.7%(5)
|
||||
Toppan
CFI (Taiwan) Co., Ltd.
|
Manufacturing
and sale of color filters
|
ROC
|
NT$15,363.0
|
49%(6)
|
||||
BriView
Technology Corp.
|
Manufacturing
and sale of liquid crystal products and related parts
|
ROC
|
NT$100.0
|
60%
|
(1)
|
Indirectly,
through our 100% ownership of AU Optronics (L)
Corp.
|
(2)
|
Indirectly,
through our 73.53% ownership of Darwin Precisions (L)
Corp.
|
(3)
|
Indirectly,
through our 73.53% ownership of Darwin Precisions (Hong Kong)
Limited.
|
(4)
|
Formerly
Quanta Display Technology Investment
Ltd.
|
(5)
|
45.45%
held directly by us and 18.94% and 2.31% held indirectly through Konly
Venture Corp. and Ronly Venture Corp.,
respectively.
|
(6)
|
We
consolidated Toppan CFI (Taiwan) Co., Ltd. in accordance with FIN 46R
starting from fiscal year 2007. See note 26 to our consolidated
financial statements.
|
(7)
|
Activities
are still in the planning stage.
|
Location
|
Building
Size
|
Input
Substrate Size / Installed Capacity
|
Commencement
of Commercial Production
|
Primary
Use
|
Owned
or Leased
|
|||||
(in
square
meters)
|
(in
millimeters)/ (substrates processed per month)
|
|||||||||
No.
5, Li-Hsin Rd.
6,
Hsinchu
Science
Park,
Hsinchu
30078,
Taiwan,
ROC
|
69,647
|
610x720/40,000(1)
|
December
1999
|
Manufacturing
of TFT-LCD panels
|
· Building
is owned
· Land
is leased (expires in December 2020)
|
|||||
No.
1, Li-Hsin Rd.
2,
Hsinchu
Science
Park,
Hsinchu
30078,
Taiwan,
ROC
|
162,895
|
610x720/LTPS
20,000(1)
|
November
2000
|
Manufacturing
of TFT-LCD panels; business operations; research and development; sales
and marketing
|
· Building
is owned
· Land
is leased (expires in December 2020)
|
|||||
No.
23, Li-Hsin Rd.
Hsinchu
Science
Park,
Hsinchu
30078,
Taiwan,
ROC
|
105,127
|
600x720/60,000(1)
|
July
1999
|
Manufacturing
of TFT-LCD panels
|
· Building
is owned
· Land
is leased (expires in January 2017)
|
Location
|
Building
Size
|
Input
Substrate Size / Installed Capacity
|
Commencement
of Commercial Production
|
Primary
Use
|
Owned
or Leased
|
|||||
(in
square
meters)
|
(in
millimeters)/ (substrates processed per month)
|
|||||||||
No.
189, Hwaya Rd. 2,
Kueishan
Hwaya
Science
Park,
Kueishan
33383,
Taoyuan,
ROC*
|
162,826
|
620x750/a-Si
30,000(1)
1,100x1,300/70,000(2)
|
December
2001
October
2003
|
Manufacturing
of TFT-LCD panels
|
· Building
is owned
· Land is
owned
|
|||||
No.
1, Xinhe Rd.
Aspire
Park
Lungtan
32543,
Taoyuan
Taiwan,
ROC
|
535,528
|
680x880/60,000(3)
1,100x1,250/50,000(2)
1,100x1,300/70,000(2)
|
February
2001 March 2003 February 2004
|
Manufacturing
of TFT-LCD panels; module and component assembly; manufacturing of color
filters
|
· Building
is owned
· Land is owned
|
|||||
No.
228, Lungke St.,
Lungke
Science Park,
Lungtan,
32542,
Taoyuan,
Taiwan,
ROC*
|
867,955
|
1,500x1,850/120,000(4)
|
August
2005
|
Manufacturing
of TFT-LCD panels; manufacturing of color filters
|
· Building
is owned
· Land
is leased (expires in December 2027)
|
|||||
No.
1 JhongKe Rd.
Central
Taiwan
Science
Park
Taichung
40763,
Taiwan,
ROC
|
1,430,750
|
1,500x1,850/120,000(4)
1,100x1,300/120,000(2)
1,950x2,250/75,000(5)
1,950x2,250
(5)
2,200x2,500/10,000(6) |
March
2005
August
2005
September
2006
Pending,
subject to market condition
Planned
in June 2009
|
Manufacturing
of TFT-LCD panels; module and component assembly; manufacturing of color
filters
|
· Building
is owned
· Land
is leased (expires in December 2022)
|
|||||
No.
398, Suhong
Zhong
Road
Suzhou
Industrial
Park,
Suzhou,
China
|
413,035
|
N/A
|
July
2002
|
Module
and component assembly
|
· Building
is owned
· Land
is leased (expires in 2051)
|
|||||
No.
3, Lane 58, San-Zhuang Rd., Songjiang Export Processing Zone, Shanghai,
China*
|
83,508
|
N/A
|
October
2004
|
Module
and component assembly
|
· Building
is owned
· Land
is leased (expires in 2052)
|
Location
|
Building
Size
|
Input
Substrate Size / Installed Capacity
|
Commencement
of Commercial Production
|
Primary
Use
|
Owned
or Leased
|
|||||
(in
square
meters)
|
(in
millimeters)/ (substrates processed per month)
|
|||||||||
No.
1689, North of XiangAn Rd., XiangAn Branch, Torch Hi-tech Industrial
Development Zone,
Xiamen,
China
|
289,662
|
N/A
|
September
2007
|
Module
and component assembly
|
· Building
is owned
· Land
is leased (expires in 2056)
|
|||||
Turanka
856/98b, Slatina,
627
00, Brno, Czech Republic
|
12,288
|
N/A
|
April
2008
|
Module
and TV set assembly; TFT-LCD related products repair
service
|
· Building
is leased (expires in December 2013)
· Land
is leased (expires in December
2013)
|
*
|
Facilities
acquired through our merger with
QDI.
|
(1)
|
3.5-generation
fab.
|
(2)
|
Fifth-generation
fab.
|
(3)
|
Fourth-generation
fab.
|
(4)
|
Sixth-generation
fab.
|
(5)
|
7.5-generation
fab.
|
(6)
|
Eighth-generation
fab.
|
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Balance
at beginning of year
|
414,086 | 833,524 | 1,255,033 | 38,310 | ||||||||||||
Provision
charged to revenue
|
2,322,856 | 4,165,379 | 2,793,933 | 85,285 | ||||||||||||
Allowance
assumed from the merger with QDI
|
98,190 | — | — | — | ||||||||||||
Write-off
|
(2,001,608 | ) | (3,743,870 | ) | (2,903,831 | ) | (88,640 | ) | ||||||||
Balance
at end of year
|
833,524 | 1,255,033 | 1,145,135 | 34,955 |
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Balance
at beginning of year
|
91,422 | 474,025 | 317,183 | 9,682 | ||||||||||||
Provision
charged to expense (reversed to income)
|
278,216 | (71,435 | ) | (187,011 | ) | (5,709 | ) | |||||||||
Allowance
assumed from the merger with QDI
|
149,866 | — | — | — | ||||||||||||
Write-off
|
(45,479 | ) | (85,407 | ) | (30,839 | ) | (941 | ) | ||||||||
Balance
at end of year
|
474,025 | 317,183 | 99,333 | 3,032 |
Year
Ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
%
|
%
|
%
|
||||||||||
Net
sales
|
100.0 | 100.0 | 100.0 | |||||||||
Cost
of goods sold
|
89.8 | 82.1 | 86.9 | |||||||||
Gross
profit
|
10.2 | 17.9 | 13.1 |
Year
Ended December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
%
|
%
|
%
|
||||||||||
Operating
expenses
|
5.3 | 4.7 | 5.9 | |||||||||
Selling
|
2.3 | 2.4 | 2.7 | |||||||||
General
and administrative
|
1.4 | 1.1 | 1.9 | |||||||||
Research
and development
|
1.6 | 1.2 | 1.3 | |||||||||
Operating
income
|
4.9 | 13.2 | 7.2 | |||||||||
Net
non-operating loss
|
(1.4 | ) | (1.0 | ) | (1.0 | ) | ||||||
Income
before income tax
|
3.5 | 12.2 | 6.2 | |||||||||
Income
tax expenses
|
0.4 | 0.4 | 1.1 | |||||||||
Net
income
|
3.1 | 11.8 | 5.1 |
·
|
Share
offerings in 1999 by Unipac and QDI for the purchase of equipment used at
our second and fourth 3.5-generation fabs respectively and share offering
in 1999 by Acer Display for the purchase of equipment used at our
fourth-generation fab.
|
·
|
The
tax exemption period relating to our fourth 3.5-generation fab commenced
in 2005 and will expire in December,
2009.
|
·
|
The
tax exemption period relating to our fourth-generation fab commenced in
2005 and will expire in December,
2009.
|
·
|
Share
offering in 2000 and 2002 by QDI for the purchase of equipment used at our
3.5-generation fab and 5.5-generation fab,
respectively.
|
·
|
The
tax exemption period relating to our 3.5-generation fab commenced in 2005
and will expire in December, 2009.
|
·
|
The
tax exemption period relating to our 5.5-generation fab commenced in 2007
and will expire in 2011.
|
·
|
Share
offerings in 2001 by Unipac, Acer Display and QDI for the purchase of
equipment used at our fourth-generation fab and 3.5-generation
fab.
|
·
|
The
tax exemption period relating to our fourth-generation fab commenced in
2005 and will expire in December,
2009.
|
·
|
The
tax exemption period relating to our 3.5-generation fab commenced in 2006
and will expire in 2010.
|
·
|
Share
offering in 2003, 2004 and 2005 by QDI for the purchase of equipment used
at our 5.5-generation fab and sixth-generation fab,
respectively.
|
·
|
The
tax exemption period relating to our 5.5-generation fab commenced in 2008
and will expire in 2012.
|
·
|
One
tax exemption period relating to our sixth-generation fab commenced in
2007 and will expire in 2012.
|
·
|
The
other tax exemption period relating to our sixth-generation fab is five
years, we have not yet designated the year from which we will use this tax
exemption.
|
·
|
Capitalization
of retained earnings in 2001 for the purchase of equipment used at our
3.5-generation fab.
|
·
|
The
tax exemption period relating to our 3.5-generation fab commenced in 2006
and will expire in July 2009.
|
·
|
Capitalization
of retained earnings in 2003 for the purchase of equipment used at our
fifth-generation fab.
|
·
|
The
tax exemption period commenced in 2006 and will expire in
2010.
|
·
|
Issuance
of ADS in 2002 for the purchase of equipment used at our fifth-generation
fab.
|
·
|
The
tax exemption period commenced in 2006 and will expire in
2010.
|
·
|
Capitalization
of retained earnings in 2004 for the purchase of equipment used at our
sixth-generation fab.
|
·
|
The
tax exemption period commenced in 2007 and will expire in
2012.
|
·
|
Issuance
of ADS in 2004 for the purchase of equipment used at our fifth-generation
fab.
|
·
|
The
tax exemption period commenced in 2007 and will expire in
2012.
|
·
|
Capitalization
of retained earnings in 2005 and 2006 for the purchase of equipment used
at our 7.5-generation fab.
|
·
|
The
tax exemption period is five years.
|
·
|
We
have not yet designated the year from which we will use this tax
exemption.
|
·
|
Issuance
of ADS in 2005 for the purchase of equipment used at our sixth-generation
and 7.5-generation fabs.
|
·
|
The
tax exemption period is five years.
|
·
|
We
have not yet designated the year from which we will use this tax
exemption.
|
·
|
Capitalization
of retained earnings in 2007 for the purchase of equipment used at our
sixth-generation, 7.5-generation and eighth-generation
fabs.
|
·
|
The
tax exemption period is five years.
|
·
|
We
have not yet designated the year from which we will use this tax
exemption.
|
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Equipment
purchases
|
64,411.7 | 49,319.3 | 101,326.1 | 3,093.0 | ||||||||||||
Land
and building purchases
|
24,834.6 | 584.2 | 1,813.8 | 55.4 |
Payments
due by Period
|
||||||||||||||||||||
Total
|
Less
than
1
year
|
1-3
years
|
3-5
years
|
More
than
5
years
|
||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Contractual
Obligations
|
||||||||||||||||||||
Long-term
debt obligations(1)
|
161,038.6 | 44,293.1 | 79,719.1 | 34,799.5 | 2,226.8 | |||||||||||||||
Operating
lease obligations(2)
|
3,913.4 | 362.9 | 655.0 | 600.3 | 2,295.2 | |||||||||||||||
Purchase
obligations(3)
|
57,122.5 | 57,122.5 | — | — | — | |||||||||||||||
Total
|
222,074.5 | 101,778.5 | 80,374.1 | 35,399.8 | 4,522.0 |
(1)
|
Includes
bonds payable, convertibles bonds payable and long-term borrowings and
estimated relevant interest payments in any given period in the
future. The interest rates are based on implied forward rates
in the yield curve at the reporting date and management’s expectations for
future interest rates. See notes 14, 15 and 16 to our
consolidated financial statements for further information regarding
interest rates and future repayment of long-term
debts.
|
(2)
|
Represents
our obligations to make lease payments to use the land on which our fabs
and module-assembly facilities are
located.
|
(3)
|
Includes
purchase orders for the machinery and equipment at our fabs. We have
placed orders related to the installation of machinery and equipment at
our 7.5-generation and our 8.5-generation fabs. As of December 31, 2008,
we had made commitments of approximately NT$ 24.4 billion (US$0.7
billion), primarily relating to the 7.5-generation fab, and approximately
NT$20.9 billion (US$0.6 billion), relating to the 8.5-generation
fab.
|
Year
Ended and as of December 31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
income in accordance with
|
||||||||||||||||
ROC
GAAP
|
9,093.4 | 56,475.9 | 21,641.8 | 660.6 | ||||||||||||
US
GAAP
|
1,173.2 | 45,355.5 | 13,089.7 | 399.6 | ||||||||||||
Stockholders’
equity in accordance with
|
||||||||||||||||
ROC
GAAP
|
231,076.3 | 300,819.9 | 299,258.7 | 9,134.9 | ||||||||||||
US
GAAP
|
238,618.1 | 291,865.8 | 293,391.9 | 8,955.8 |
Name
|
Age
|
Position
|
Term
Expires
|
Years
with
Us
|
Principal
Business Activities Performed
Outside Our Company
|
|||||
Kuen-Yao
(K.Y.) Lee
|
57
|
Chairman
|
2010
|
13
|
Chairman
of Qisda and Chairman of BenQ Corporation
|
|||||
Hsuan
Bin (H.B.) Chen
|
58
|
Vice-Chairman
|
2010
|
12
|
Chairman
of Wellypower Optronics Corporation
|
|||||
Hui
Hsiung
|
56
|
Director
|
2010
|
13
|
Chief
Executive Officer and President of Qisda; Director of
Qisda
|
|||||
Ronald
Jen-Chuan Chwang(1)
|
61
|
Director
|
2010
|
1
|
Chairman
and President of iD Ventures
America
|
Name
|
Age
|
Position
|
Term
Expires
|
Years
with
Us
|
Principal
Business Activities Performed
Outside Our Company
|
|||||
Ko-Yung
(Eric) Yu(2)
|
53
|
Director
|
2010
|
13
|
Senior
Vice President of Qisda
|
|||||
Ching-Shih
Han(3)
|
45
|
Director
|
2010
|
2
|
Director
of Wellypower Optronics Corporation; Director of Cando Corporation; Vice
President of CDIB
|
|||||
Vivien
Huey-Juan Hsieh
|
56
|
Director
|
2010
|
5
|
Supervisor
of Chief Telecom Inc.
|
|||||
Chieh-Chien
Chao
|
65
|
Director
|
2010
|
5
|
Professor
at National Taiwan University
|
|||||
Tze-Kaing
Yang
|
55
|
Director
|
2010
|
2
|
Director
of Taiwan Stock Exchange Corporation; Supervisor of ASUSTeK Computer
Inc.
|
(1)
|
Representing
Qisda.
|
(2)
|
Representing
Qisda.
|
(3)
|
Representing
CDIB.
|
Name
|
Age
|
Position
|
Years
with Us
|
|||
Lai-Juh
(L.J.) Chen
|
46
|
Chief
Executive Officer and President
|
10
|
|||
Andy
Yang
|
41
|
Chief
Financial Officer
|
7
|
|||
Paul
Peng
|
51
|
Executive
Vice President of Global Business
|
13
|
|||
F.C.
Hsiang
|
50
|
Executive
Vice President of Global Operation Unit
|
10
|
|||
Max
Cheng
|
47
|
Executive
Vice President of Global New Business
|
13
|
As
of December 31,
|
||||||||||||
Function
|
2006
|
2007
|
2008
|
|||||||||
Production
|
31,192 | 38,455 | 31,381 | |||||||||
Technical(1)
|
7,685 | 8,285 | 9,279 | |||||||||
Sales
and marketing
|
566 | 658 | 582 | |||||||||
Management
and administration
|
1,567 | 1,712 | 2,025 | |||||||||
Total
|
41,010 | (2) | 49,110 | 43,267 |
(1)
|
Includes
research and development personnel.
|
(2)
|
We
added 5,855 employees as a result of the merger with
QDI.
|
As
of December 31,
|
||||||||||||
Location
|
2006
|
2007
|
2008
|
|||||||||
Taiwan(1)
|
20,965 | 21,190 | 21,030 | |||||||||
PRC(2)
|
19,973 | 27,833 | 22,077 | |||||||||
Others
|
72 | 87 | 160 | |||||||||
Total
|
41,010 | (3) | 49,110 | 43,267 |
(1)
|
Employed
by AU Optronics Corp. and Toppan
CFI.
|
(2)
|
Employed
by AU Optronics (Suzhou) Corp., AU Optronics (Xiamen) Corp. and Tech-Well
(Shanghai) Display Co.
|
(3)
|
We
added 5,855 employees as a result of the merger with
QDI.
|
Name
|
Number
of Shares
Owned
|
Percentage
of Shares
Owned
|
||||
Kuen-Yao
(K.Y.) Lee, Chairman
|
10,244,809
|
*
|
||||
Hsuan
Bin (H.B.) Chen, Vice-Chairman
|
6,481,634
|
*
|
||||
Hui
Hsiung, Director
|
3,559,493
|
*
|
||||
Ronald
Jen-Chuan Chwang, Director
|
644,270,505
|
(1) |
7
|
.57%
|
||
Ko-Yung
(Eric) Yu, Director
|
644,270,505
|
(1) |
7
|
.57%
|
||
Lai-Juh
(L.J.) Chen, Chief Executive Officer and President
|
2,902,154
|
*
|
||||
Ching-Shih
Han, Director
|
43,620,658
|
(2) |
*
|
|||
Vivien
Huey-Juan Hsieh, Director
|
—
|
—
|
||||
Chieh-Chien
Chao, Director
|
—
|
—
|
||||
Tze-Kaing
Yang, Director
|
—
|
—
|
||||
Andy
Yang, Chief Financial Officer
|
351,708
|
*
|
||||
Paul
Peng, Executive Vice President of Global Business
|
2,726,952
|
*
|
||||
F.C.
Hsiang, Executive Vice President of Global Operation Unit
|
2,534,010
|
*
|
||||
Max
Cheng, Executive Vice President of Global New Business
|
2,274,002
|
*
|
*
|
The
number of common shares held is less than 1% of our total outstanding
common shares.
|
(1)
|
Represents
shares held by Qisda.
|
(2)
|
Represents
shares held by CDIB.
|
Name
of Beneficial Owner
|
Number
of Shares Beneficially
Owned
|
Percentage
of Shares Beneficially
Owned
|
Percentage
of Shares Beneficially
Owned(Fully
Diluted)
|
|||
Qisda
157,
Shan-Ying Road,
Gueishan,
Taoyuan 333,
Taiwan,
ROC
|
647,951,015
|
7.61%
|
7.61%
|
|||
Quanta
Computer Inc.
(1)
211,
Wen Hwa 2nd
Road,
Gueishan
Hsiang, Taoyuan,
Taiwan,
ROC
|
431,000,299
|
5.06%
|
5.06%
|
|||
All
directors as a group(2)
|
709,894,575
|
8.35%
|
8.35%
|
(1)
|
As
of April 21, 2009.
|
(2)
|
Calculated
as the sum of: (a) with respect to directors who are serving in their
personal capacity, the number of shares held by such director and (b) with
respect to directors who are serving in the capacity as legal
representatives, the number of shares owned by such institutional or
corporate shareholder for which such director is a legal
representative.
|
·
|
pre-approval
by a majority vote of disinterested directors of each sale to, or purchase
of raw materials and components from, a related party that is in the
ordinary course of our business, which transaction involves a transaction
amount in excess of 5% of our net sales or raw materials and component
purchases, as the case may be, for the previous three months on an
unconsolidated basis, provided that any series of similar transactions
with the same related party that collectively exceeds 40% of our net sales
or raw materials and component purchases, as the case may be, for the
previous three months on an unconsolidated basis shall also require
pre-approval;
|
·
|
periodic
review by our board of directors of other related party transactions in
the ordinary course of business;
|
·
|
pre-approval
by a majority vote of disinterested directors of related party
transactions not in the ordinary course of business and not otherwise
specified in our related party transaction policy;
and
|
·
|
recusal
of any interested director from consideration of matters involving the
company he or she represents or with respect to which the director might
have a conflict of interest.
|
·
|
payment
of all income taxes; and
|
·
|
deduction
of any past losses.
|
·
|
no
less than 5% of the earnings to be distributed is distributable as a bonus
for employees;
|
·
|
no
more than 1% of the earnings to be distributed is distributable as
remuneration to directors; and
|
·
|
all
or a portion of the balance is distributable as dividend and bonus to our
shareholders.
|
Taiwan
Stock Exchange
|
New
York Stock Exchange(1)
|
|||||||||||||||||||||||
Closing
Price per
Share
|
Average
Daily
Trading
Volume
|
Closing
Price per
ADS
|
Average
Daily
Trading
Volume
|
|||||||||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||||||||||
(NT$)
|
(NT$)
|
(in
thousands of shares)
|
(US$)
|
(US$)
|
(in
thousand of ADSs)
|
|||||||||||||||||||
2004
|
78.50 | 41.40 | 97,560.92 | 27.93 | 12.47 | 3,274.97 | ||||||||||||||||||
2005
|
55.70 | 41.50 | 58,771.47 | 18.14 | 12.73 | 1,848.57 | ||||||||||||||||||
2006
|
55.20 | 40.00 | 47,043.79 | 17.56 | 12.16 | 2,162.58 | ||||||||||||||||||
First
Quarter
|
55.20 | 45.55 | 61,146.76 | 17.30 | 14.15 | 2,531.71 | ||||||||||||||||||
Second
Quarter
|
55.10 | 40.00 | 56,726.53 | 17.56 | 12.16 | 2,049.58 | ||||||||||||||||||
Third
Quarter
|
50.60 | 44.15 | 37,891.75 | 15.83 | 13.46 | 2,054.66 | ||||||||||||||||||
Fourth
Quarter
|
47.60 | 42.10 | 33,973.65 | 14.46 | 12.76 | 2,021.21 | ||||||||||||||||||
2007
|
70.40 | 43.30 | 48,530.06 | 22.41 | 13.06 | 1,881.55 | ||||||||||||||||||
First
Quarter
|
48.60 | 43.30 | 34,827.81 | 15.06 | 13.06 | 1,484.99 | ||||||||||||||||||
Second
Quarter
|
59.10 | 47.85 | 36,845.32 | 17.99 | 14.69 | 1,434.95 | ||||||||||||||||||
Third
Quarter
|
58.80 | 45.90 | 45,369.76 | 17.97 | 14.01 | 1,891.25 | ||||||||||||||||||
Fourth
Quarter
|
70.40 | 52.30 | 74,754.40 | 22.41 | 15.99 | 2,689.59 | ||||||||||||||||||
2008
|
62.70 | 18.30 | 70,171.86 | 20.66 | 5.02 | 3,343.94 | ||||||||||||||||||
First
Quarter
|
61.30 | 51.10 | 81,208.32 | 19.74 | 15.99 | 3,368.69 | ||||||||||||||||||
Second
Quarter
|
62.70 | 47.10 | 72,280.56 | 20.66 | 15.55 | 3,371.35 | ||||||||||||||||||
Third
Quarter
|
48.20 | 31.05 | 69,864.02 | 15.74 | 10.20 | 3,247.35 | ||||||||||||||||||
Fourth
Quarter
|
36.00 | 18.30 | 58,753.02 | 11.38 | 5.02 | 3,389.52 | ||||||||||||||||||
November
|
24.30 | 18.30 | 59,209.40 | 7.57 | 5.02 | 3,947.30 | ||||||||||||||||||
December
|
24.70 | 19.30 | 62,057.74 | 7.68 | 5.83 | 3,109.55 | ||||||||||||||||||
2009
(through May 26)
|
38.20
|
23.05
|
69,646.93
|
12.00
|
6.66
|
3,841.87
|
||||||||||||||||||
First
Quarter
|
29.90 | 23.05 | 66,737.51 | 9.01 | 6.66 | 3,524.08 | ||||||||||||||||||
January
|
27.50 | 23.05 | 67,638.20 | 8.60 | 6.83 | 3,398.41 | ||||||||||||||||||
February
|
27.80 | 23.30 | 60,908.45 | 8.47 | 6.96 | 3,560.08 | ||||||||||||||||||
March
|
29.90 | 24.25 | 71,422.55 | 9.01 | 6.66 | 3,607.23 | ||||||||||||||||||
April
|
35.25 | 28.50 | 73,911.45 | 10.85 | 8.66 | 4,348.21 | ||||||||||||||||||
May
(through May 26)
|
38.20
|
32.95
|
73,883.24
|
12.00
|
10.27
|
4,356.69
|
(1)
|
Each
ADS represents the right to receive 10 common
shares.
|
·
|
any
amendment to our articles of
incorporation;
|
·
|
our
dissolution or amalgamation;
|
·
|
a
merger or spin-off;
|
·
|
transfers
of the whole or a substantial part of our business or
properties;
|
·
|
the
acquisition of the entire business of another company which would have a
significant impact on our
operations;
|
·
|
the
distribution of any stock dividend;
or
|
·
|
the
removal of directors.
|
·
|
payment
of all income taxes; and
|
·
|
deduction
of any past losses.
|
·
|
No
less than 5% of the earnings to be distributed is distributable as a bonus
for employees;
|
·
|
no
more than 1% of the earnings to be distributed is distributable as
remuneration to directors; and
|
·
|
all
or a portion of the balance is distributable as a dividend and bonus to
our shareholders.
|
·
|
to
transfer shares to our employees;
|
·
|
to
facilitate conversion arising from bonds with warrants, preferred shares
with warrants, convertible bonds, convertible preferred shares or
certificates of warrants (collectively, the “Convertible Securities”)
issued by our company into shares;
and
|
·
|
if
necessary, to maintain our credit and our shareholders’ equity; provided
that the shares so purchased shall be cancelled
thereafter.
|
·
|
Within
30 days from the date on which a shareholders’ resolution is adopted, a
shareholder may file a lawsuit to annul a shareholders’ resolution if the
procedure for convening a shareholders’ meeting or the method of
resolution violates any law or regulation or our articles of
incorporation.
|
·
|
If
the substance of a resolution adopted at a shareholders’ meeting
contradicts any applicable law or regulation or our articles of
incorporation, a shareholder may bring a suit to determine the validity of
such resolution.
|
·
|
Shareholders
who have continuously held 3% or more of the total number of issued and
outstanding shares for a period of one year or longer may request in
writing that an audit committee member institute an action against a
director on our behalf. In case the audit committee member fails to
institute an action within 30 days after receiving such request, the
shareholders may institute an action on our behalf. In the event that
shareholders institute an action, a court may, upon motion of the
defendant, order such shareholders to furnish appropriate
security.
|
·
|
In
the event that any director, officer or shareholder who holds more than
10% of our issued and outstanding shares and their respective spouse and
minor children and/or nominees sells shares within six months after the
acquisition of such shares, or repurchases the shares within six months
after the sale, we may make a claim for recovery of any profits realized
from the sale and purchase. If our board of directors or our audit
committee fail to make a claim for recovery, any shareholder may request
that our board of directors or our audit committee exercise the right of
claim within 30 days. In the event our directors or audit committee fail
to exercise such right during such 30-day period, such requesting
shareholder will have the right to make a claim for such recovery on our
behalf. Our directors and audit committee will be jointly and severally
liable for damages suffered by us as a result of their failure to exercise
the right of claim.
|
|
·
|
you
are an individual and you are not physically present in the ROC for 183
days or more during any calendar year;
or
|
|
·
|
you
are an entity and you are organized under the laws of a jurisdiction other
than the ROC and have no fixed place of business or other permanent
establishment or business agent in the
ROC.
|
|
·
|
a
citizen or resident of the United
States;
|
|
·
|
a
corporation, or other entity taxable as a corporation, created or
organized in or under the laws of the United States or any political
subdivision thereof; or
|
|
·
|
an
estate or trust the income of which is subject to U.S. federal income
taxation regardless of its
source.
|
|
·
|
dealers
and traders in securities who use a mark-to-market method of
accounting;
|
|
·
|
certain
financial institutions;
|
|
·
|
tax-exempt
entities, including “individual retirement
accounts”;
|
|
·
|
entities
classified as partnerships for U.S. federal income tax
purposes;
|
|
·
|
persons
holding ADSs or shares as part of a hedge, straddle, wash sale, conversion
transaction or integrated transaction or persons entering into a
constructive sale with respect to the ADSs or
shares;
|
|
·
|
persons
that own or are deemed to own 10% or more of our voting
stock;
|
|
·
|
persons
whose functional currency for U.S. federal income tax purposes is not the
U.S. dollar;
|
|
·
|
persons
who acquired ADSs or shares pursuant to the exercise of any employee stock
option or otherwise as compensation;
or
|
|
·
|
persons
holding shares in connection with a trade or business conducted outside of
the United States.
|
Expected
Maturity Date
|
||||||||||||||||||||||||||||||||
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
Total
|
Fair
Value at December 31, 2008
|
|||||||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||||
Certificates
of Deposit:
|
||||||||||||||||||||||||||||||||
Fixed
rate (US$)
|
467,507 | — | — | — | — | — | 467,507 | 467,507 | ||||||||||||||||||||||||
Average
interest rate
|
0.638 | % | — | — | — | — | — | 0.638 | % | 0.638 | % | |||||||||||||||||||||
Fixed
rate (NT$)
|
35,821,664 | — | — | — | — | — | 35,821,664 | 35,821,664 | ||||||||||||||||||||||||
Average
interest rate
|
1.520 | % | — | — | — | — | — | 1.520 | % | 1.520 | % | |||||||||||||||||||||
Fixed
rate (JP¥)
|
5,618,237 | — | — | — | — | — | 5,618,237 | 5,618,237 | ||||||||||||||||||||||||
Average
interest rate
|
0.429 | % | — | — | — | — | — | 0.429 | % | 0.429 | % | |||||||||||||||||||||
Fixed
rate (CNY)
|
607,000 | — | — | — | — | — | 607,000 | 607,000 | ||||||||||||||||||||||||
Average
interest rate
|
1.516 | % | — | — | — | — | — | 1.516 | % | 1.516 | % | |||||||||||||||||||||
Fixed
rate (CZK)
|
110,000 | — | — | — | — | — | 110,000 | 110,000 | ||||||||||||||||||||||||
Average
interest rate
|
4.009 | % | — | — | — | — | — | 4.009 | % | 4.009 | % | |||||||||||||||||||||
Liabilities
Bonds:
|
||||||||||||||||||||||||||||||||
Secured
(NT$)(1)
|
5,500,000 | 5,500,000 | 6,000,000 | 3,500,000 | — | — | 20,500,000 | 20,808,217 | ||||||||||||||||||||||||
Fixed
rate
|
1.741 | % | 1.976 | % | 2.503 | % | 2.900 | % | — | — | 2.225 | % | — | |||||||||||||||||||
Secured
Long-term Loans:
|
||||||||||||||||||||||||||||||||
Fixed
rate (NT$)
|
550,000 | 475,000 | — | — | — | — | 1,025,000 | 1,034,664 | ||||||||||||||||||||||||
Average
interest rate
|
2.715 | % | 2.734 | % | — | — | 2.724 | % | — | |||||||||||||||||||||||
Variable
rate (NT$)
|
29,941,872 | 31,543,967 | 31,946,583 | 19,745,575 | 10,717,295 | 2,222,222 | 126,117,514 | — | ||||||||||||||||||||||||
Average
interest rate(2)
|
1.994 | % | 1.918 | % | 2.146 | % | 2.280 | % | 2.659 | % | 2.077 | % | 2.116 | % | — | |||||||||||||||||
Interest
Rate Swaps(3):
|
||||||||||||||||||||||||||||||||
Variable
to fixed (NT$)(4)
|
4,500,000 | 1,000,000 | 23,333,333 | 13,777,778 | — | — | 42,611,111 | (823,991 | ) | |||||||||||||||||||||||
Pay
rate
|
2.536 | % | 2.040 | % | 2.046 | % | 2.484 | % | — | — | 2.239 | % | — |
(1)
|
NT$2.5
billion are variable rate which have been fully hedged through structure
interest rate swaps and NT$18.0 billion are fixed
rate.
|
(2)
|
The
weighted average interest rate of the NT$-denominated
loan.
|
(3)
|
90-day
Taipei Money Market Secondary middle rate settled quarterly (1.125% on
December 31, 2008).
|
(4)
|
We
also have additional NT$2.5 billion of structure interest rate swaps
outstanding as of December 31, 2008 for the purpose of hedging our
variable rate bonds.
|
(in
thousands)
|
||
Contracts
to sell NT$/Buy US$:
|
||
Aggregate
contract amount
|
NT$1,001,650
|
|
Average
contractual exchange rate
|
US$0.03
per NT$
|
|
Contracts
to sell US$/Buy EUR:
|
||
Aggregate
contract amount
|
US$21,033
|
|
Average
contractual exchange rate
|
EUR0.71
per US$
|
|
Contracts
to sell NT$/Buy Japanese yen:
|
||
Aggregate
contract amount
|
NT$14,983,792
|
|
Average
contractual exchange rate
|
JPY2.92
per NT$
|
(in
thousands)
|
||
Contracts to sell US$/Buy JPY: | ||
Aggregate
contract amount
|
US$33,500 | |
Average
contractual exchange rate
|
JPY97.10 per
US$
|
|
Contracts
to sell US$/Buy CNY:
|
||
Aggregate
contract amount
|
US$15,000
|
|
Average
contractual exchange rate
|
CNY6.86
per US$
|
|
Contracts
to sell CNY/Buy US$:
|
||
Aggregate
contract amount
|
CNY48,272
|
|
Average
contractual exchange rate
|
US$0.15
per CNY
|
|
Fair
value of all forward contracts(1)
|
NT$1,038,700
|
(1)
|
Fair
value represents the amount of the receivable from or payable to the
counter-parties if the contracts were terminated on the balance sheet
date.
|
·
|
pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect our transactions and dispositions of our
assets;
|
·
|
provide
reasonable assurance that our transactions are recorded as necessary to
permit preparation of our financial statements in accordance with ROC GAAP
and US GAAP, and that our receipts and expenditures are being made only in
accordance with authorizations of our management and our directors;
and
|
·
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on the financial
statements.
|
Year
ended December 31,
|
||||||||
Services
|
2007
|
2008
|
||||||
NT$
|
NT$
|
|||||||
(in
thousands)
|
||||||||
Audit
Fees(1)
|
40,000 | 50,300 | ||||||
Tax
Fees(2)
|
— | — | ||||||
Total
|
40,000 | 50,300 |
(1)
|
Audit
Fees. This category includes the audit of our financial
statements, review of quarterly financial statements and services that are
normally provided by the independent auditors in connection with statutory
and regulatory filings or engagements for those fiscal years, and service
related to the audit of the effectiveness of our internal control over
financial reporting required by Section 404 of the Sarbanes-Oxley Act of
2002. This category also includes advice on audit and
accounting matters that arose during, or as a result of, the audit or the
review of quarterly financial statements and statutory audits required by
non-U.S. jurisdictions, including statutory audits required by the Tax
Bureau of the ROC, Customs Bureau of the ROC and Financial Supervisory
Commission of the ROC. This category also includes assistance
with and review of documents filed with the SEC.
|
(2)
|
Tax
Fees. This category consists of professional services
for tax compliance.
|
NYSE
Standards for US Companies
under
Listed Company Manual
Section
303A
|
Our
Corporate Practices
|
NYSE Section 303A.01
requires a NYSE-listed company to have a majority of independent
directors on its board of directors.
|
ROC
law does not require a public company to have a majority of independent
directors on its board of directors. ROC law requires
public companies meeting certain criteria to have two independent
directors but no less than one-fifth of the total number of our
directors. We have three independent directors on our
nine-member board of directors.
|
NYSE
Section 303A.02 establishes general standards to evaluate
directors’ independence (no director qualifies as independent unless the
board of directors affirmatively determines that the director has no
material relationship with the listed company either directly or as a
partner, shareholder or officer of an organization that has a relationship
with the listed company).
|
Our
standards for determining director independence, which comply with ROC
requirements for directors independence, may differ from the standards
imposed by the NYSE.
The
independence standards of our directors are disclosed in our ROC annual
report.
Our
board of directors have affirmatively determined that our three
independent directors have no material relationship with
us.
|
NYSE Section 303A.03
requires non-management directors to meet at regularly scheduled
executive meetings that are not attended by management.
|
ROC
law does not contain such a requirement, and our non-management directors
do not meet at regularly scheduled executive sessions without
management.
|
NYSE Section 303A.04
requires listed companies to have a nominating/corporate governance
committee comprised entirely of independent directors which committee
shall have a written charter establishing certain minimum responsibilities
as set forth in NYSE Section 303A.04(b)(i) and providing for an
annual evaluation of the committee’s performance.
|
ROC
law does not contain such a requirement, and we do not have a
nominating/corporate governance committee.
|
NYSE
Section 303A.05 requires listed companies to have a
compensation committee comprised entirely of independent directors, which
committee shall have a written charter to establish certain minimum
responsibilities and to provide for an annual evaluation of the
committee’s performance.
|
We
are not required by ROC regulations to have a compensation committee and
we do not have a compensation committee. However, the ROC
Company Law requires that the measures by which director compensation are
determined either be set forth in the company's articles of incorporation
or be approved at a shareholders’ meeting.
|
NYSE Section 303A.06
requires listed companies to have an audit committee that satisfies
the requirements of Rule 10A-3 under the Exchange
Act.
|
We
have an audit committee that substantially conforms with the requirements
of Rule 10A-3 under the Exchange
Act.
|
NYSE
Standards for US Companies
under
Listed Company Manual
Section
303A
|
Our
Corporate Practices
|
NYSE
Section 303A.07(a) requires an audit committee to consist of
at least three board members.
|
Our
audit committee is composed of our three independent
directors.
|
NYSE Section 303A.07(b)
All members of the audit committee are required to be
independent.
|
Our
audit committee members comply with the independence requirements of Rule
10A-3 under the Exchange Act.
|
NYSE
Section 303A.07(c) requires an audit committee to have a
written charter establishing the duties and responsibilities of its
members, including the duties and responsibilities required, at a minimum,
by Section 10A-3(b)(1) of the Exchange Act.
|
Our
audit committee has a written charter that is substantially similar to the
requirements of NYSE Section 303A.07(c).
|
NYSE
Section 303A.07(d) requires each company to have an internal
audit function that provides to the management and to the audit committee
regular assessments on the company’s risk management processes and
internal control system.
|
Our
internal audit function complies with the requirements of NYSE Section
303A.07(d).
|
NYSE Section 303A.08
requires each company to give to shareholders the opportunity to
vote on all equity based compensation plans and material revisions thereto
with certain exceptions.
|
Under
ROC law, shareholders approval is required for the distribution of
employee bonuses, while the board of directors has authority to approve
employee stock option plans and to grant options to employees pursuant to
such plans, subject to the approval of the FSC, Executive Yuan, ROC, and
to approve share buy-back programs and the transfer of shares to employees
under such programs.
|
NYSE Section 303A.09
requires public companies to adopt and disclose corporate
governance guidelines, including several issues for which such reporting
is mandatory, and to include such information on the company’s website
(which website should also include the charters of the audit committee,
the nominating committee, and the compensation committee.)
|
We
currently comply with ROC non-binding corporate governance principles
promulgated by the Taiwan Stock Exchange, and we provide an explanation of
differences between our practice and the principles, if any, in our ROC
annual report.
|
NYSE Section 303A.10
provides for the adoption of a code of business conduct and ethics
and sets out the topics that such code must contain.
|
Our
employee handbook, which applies to all officers and employees, contains
provisions covering conflicts of interest, corporate opportunities,
confidentiality, fair dealing, protection and proper use of company assets
and encouraging the reporting of any illegal or unethical
behavior. Although, we have not adopted a written code of
ethics specifically for our principal executive officer, principal
financial officer,
|
NYSE
Standards for US Companies
under
Listed Company Manual
Section
303A
|
Our
Corporate Practices
|
|
principal
accounting officer or controller, or persons performing
similar functions, we believe that the provisions in our
employee handbook cover these individuals and there have not been any
waivers of the provisions of the employee handbook for any officers or
employees. Ethical oversight and actual or apparent conflicts of interest
have historically been handled informally by senior management, the board
of directors and supervisors. We will continue to address violations of
the code of business conduct and ethics contained in our employee handbook
and will continue to consider a separate code of ethics with the board of
directors should the need arise.
|
NYSE
Section 303A.12(a) requires the CEO, on a yearly basis, to
certify to the NYSE that he or she knows of no violation by the company of
NYSE rules relating to corporate governance.
|
ROC
law does not contain such a requirement. But, in order to comply with
relevant SEC regulations, our CEO is required to certify in our 20-F
annual report that, to his or her knowledge the information contained
therein fairly represents in all material respects the financial condition
and results of our operation.
|
NYSE
Section 303A.12(b) requires the CEO to notify the NYSE in
writing whenever any executive officer of the company becomes aware of any
substantial non-fulfillment of any applicable provision under NYSE
Section 303A.
|
ROC
law does not contain such requirement. But, in order to be consistent with
the corporate governance principles established under the Sarbanes-Oxley
Act of 2002, our CEO complies with the notice provision as set forth under
NYSE Section 303A.12(b).
|
NYSE
Section 303A.12(c) requires each listed company to submit an
executed Written Affirmation annually to the NYSE and Interim Written
Affirmation each time a change occurs in the board or any of the
committees subject to Section 303A.
|
ROC
law does not contain such requirement. But, in order to comply with the
corporate governance principles established under the Sarbanes-Oxley Act
of 2002, we will comply with NYSE
Section 303A.12(c).
|
1.1
|
Articles
of Incorporation (English translation) (incorporated herein by reference
to Exhibit 1.1 to our annual report on Form 20-F as filed with the
Commission on June 3, 2008).
|
2.1
|
Deposit
Agreement, dated May 29, 2002, among AU Optronics Corp., Citibank, N.A. as
depositary, and Holders and Beneficial Owners of American depositary
shares evidenced by American depositary receipts issued thereunder,
including the form of American depositary receipt (incorporated herein by
reference to Exhibit 2(A) to our annual report on Form 20-F as filed with
the Commission on June 30, 2003).
|
2.2
|
Amendment
No. 1 to the Deposit Agreement, dated February 15, 2006, among AU
Optronics Corp., Citibank, N.A. as depositary, and Holders and Beneficial
Owners of American depositary shares evidenced by American depositary
receipts issued thereunder, including the amended form of American
depositary receipt (incorporated herein by reference to Exhibit 2.2 to our
annual report on Form 20-F as filed with the Commission on June 29,
2007).
|
4.1
|
Patent
and Technology License Agreement by and between FDTC and AU Optronics
Corp., for TFT-LCD technologies, dated March 31, 2003 (incorporated herein
by reference to Exhibit 4(g) to our annual report on Form 20-F as filed
with the Commission on June 30, 2003).
|
4.2
|
Stock
Purchase Agreement by and among FDTC, Fujitsu and AU Optronics Corp., for
purchase certain amount of stocks of FDTC, dated March 25, 2003
(incorporated herein by reference to Exhibit 4(i) to our annual report on
Form 20-F as filed with the Commission on June 30,
2003).
|
4.3
|
Patent
License Agreement by and between SEL and AU Optronics Corp., for amorphous
silicon TFT technologies, effective on September 1, 2003. (incorporated
herein by reference to Exhibit 4.5 to our annual report on Form 20-F as
filed with the Commission on May 5, 2004) (Confidential treatment
requested for certain portions of the agreement).
|
4.4
|
Lease
Agreement with Hsinchu Science Park Administration in relation to
government-owned land located at Hsinchu Science Park, No. 76-6 Small
Section, Hsinchu, Taiwan, Republic of China, with respect to part of the
site of our previous L1 fab (incorporated herein by reference to Exhibit
4(j) to our annual report on Form 20-F as filed with the Commission on
June 30, 2003).
|
4.5
|
Lease
Agreement with Hsinchu Science Park Administration in relation to
government-owned land located at Hsinchu Science Park, No. 77 Small
Section, Hsinchu, Taiwan, Republic of China, with respect to part of the
site of L1 fab (incorporated herein by reference to Exhibit 4(k) to our
annual report on Form 20-F as filed with the Commission on June 30,
2003).
|
4.6
|
Lease
Agreement with Hsinchu Science Park Administration in relation to
government-owned land located at Hsinchu Science Park, Nos. 255-46
Gin-Shan Section, Hsinchu, Taiwan, Republic of China, the site of one of
our 3.5-generation fabs (incorporated herein by reference to Exhibit 4(l)
to ours annual report on Form 20-F as filed with the Commission on June
30, 2003).
|
4.7
|
Lease
Agreement with Hsinchu Science Park Administration in relation to
government-owned land located at Hsinchu Science Park, Nos. 114-4 Gin-Shan
Section, Hsin-Chu, Taiwan, Republic of China, the site of one of our
3.5-generation fabs (incorporated herein by reference to Exhibit 4(m) to
our annual report on Form 20-F as filed with the Commission on June 30,
2003).
|
4.8
|
Lease
Agreement with Hsinchu Science Park Administration in relation to
government-owned land located at Hsinchu Science Park, Nos. 472 etc,
Gin-Shan Section, Hsinchu, Taiwan, Republic of China, the site of one of
our 3.5-generation fabs (incorporated herein by reference to Exhibit 4(n)
to our annual report on Form 20-F as filed with the Commission on June 30,
2003).
|
4.9
|
Lease
Agreement by and between Acer Display Technology, Inc. and Min-Tour Inc.
for No. 1 Xinhe Road Aspire Park, 325 Lungtan, Taoyuan, Taiwan, Republic
of China, the site of our fourth-generation fab and module-assembly plant
(in Chinese, with English summary translation) (incorporated herein by
reference to Exhibit 10.12 to our Registration Statement on Form F-1
(Registration No. 333-87418) as filed with Commission on May 1,
2002).
|
4.10
|
Lease
Agreement by and between AU Optronics Corp. and UMC for No. 1, Gin-Shan
Section 7 of Hsinchu Science Park, Hsinchu, Taiwan, Republic of China, the
site of one of our fourth-generation fab module-assembly plant (in
Chinese, with English summary translation) (incorporated herein by
reference to Exhibit 10.13 to our Registration Statement on Form F-1
(Registration No. 333-87418) as filed with the Commission on May 1,
2002).
|
4.11
|
Lease
Agreement by and between AU Optronics (Suzhou) Corp. and Chinese-Singapore
Suzhou Industrial Park Development Co., Ltd. for No. 398, Suhong Zhong
Road, Suzhou Industrial Park, Suzhou, The People’s Republic of China, the
site of two of our module-assembly plants (incorporated herein by
reference to Exhibit 4(q) to our annual report on Form 20-F as filed with
the Commission on June 30, 2003).
|
4.12
|
Merger
Agreement, dated April 7, 2006, between AU Optronics Corp. and Quanta
Display Inc. (incorporated herein by reference to Item 1 of our Form 6-K
as filed with the Commission on May 12, 2006).
|
4.13
|
Quanta
Display Inc. 2002 Employee Stock Option Plan (English translation)
(incorporated herein by reference to Exhibit 4.13 to our annual report on
Form 20-F as filed with the Commission on June 29,
2007).
|
4.14
|
Quanta
Display Inc. 2003 Employee Stock Option Plan (English translation)
(incorporated herein by reference to Exhibit 4.14 to our annual report on
Form 20-F as filed with the Commission on June 29,
2007).
|
8.1
|
List
of Subsidiaries.
|
12.1
|
Certification
of Lai-Juh (L.J.) Chen, Chief Executive Officer of AU Optronics Corp.,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (included on the
signature page hereto).
|
12.2
|
Certification
of Andy Yang, Chief Financial Officer of AU Optronics Corp., pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (included on the signature
page hereto).
|
13.1
|
Certification
of Lai-Juh (L.J.) Chen, Chief Executive Officer of AU Optronics Corp.,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
|
13.2
|
Certification
of Andy Yang, Chief Financial Officer of AU Optronics Corp., pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
AU
OPTRONICS CORP.
|
|||
By:
|
/s/ LAI-JUH
(L.J.) CHEN
|
||
Name:
|
Lai-Juh
(L.J.) Chen
|
||
Title:
|
Chief
Executive Officer
|
1.
|
I
have reviewed this annual report on Form 20-F of AU Optronics
Corp.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the company
as of, and for, the periods presented in this
report;
|
4.
|
The
company’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f) for the company and
have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the company, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the company’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the company’s internal control over financial
reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially
affect, the company’s internal control over financial reporting;
and
|
5.
|
The
company’s other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the company’s auditors and the audit committee of the company’s board of
directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the company’s internal control
over financial reporting.
|
By:
|
/s/ LAI-JUH
(L.J.) CHEN
|
||
Name:
|
Lai-Juh
(L.J.) Chen
|
||
Title:
|
Chief
Executive Officer
|
1.
|
I
have reviewed this annual report on Form 20-F of AU Optronics
Corp.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the company
as of, and for, the periods presented in this
report;
|
4.
|
The
company’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f) for the company and
have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the company, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the company’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the company’s internal control over financial
reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially
affect, the company’s internal control over financial reporting;
and
|
5.
|
The
company’s other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the company’s auditors and the audit committee of the company’s board of
directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the company’s internal control
over financial reporting.
|
Page
|
|
Consolidated
Financial Statements of AU Optronics Corp. and
Subsidiaries
|
|
F-1
|
|
F-2
|
|
F-4
|
|
F-6
|
|
F-9
|
|
F-11
|
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
Assets
|
||||||||||||
Current
assets:
|
||||||||||||
Cash
and cash equivalents (note 3)
|
89,889,607 | 83,434,697 | 2,546,847 | |||||||||
Accounts
receivable, net (note 7)
|
71,056,007 | 22,225,324 | 678,429 | |||||||||
Receivables
from related parties, net (note 22)
|
4,854,909 | 1,673,753 | 51,091 | |||||||||
Other
current financial assets (note 7)
|
2,350,885 | 3,082,294 | 94,087 | |||||||||
Inventories,
net (note 8)
|
35,431,026 | 23,610,687 | 720,717 | |||||||||
Prepayments
and other current assets (note 24)
|
4,522,302 | 5,348,063 | 163,250 | |||||||||
Noncurrent
assets held-for-sale (note 9)
|
1,283,738 | - | - | |||||||||
Deferred
tax assets (note 19)
|
6,973,799 | 5,380,440 | 164,238 | |||||||||
Financial
assets measured at fair value—current (note 6)
|
168,868 | 1,067,531 | 32,586 | |||||||||
Available-for-sale
financial assets—current (note 4)
|
1,347,131 | 470,301 | 14,356 | |||||||||
Total
current assets
|
217,878,272 | 146,293,090 | 4,465,601 | |||||||||
Long-term
investments:
|
||||||||||||
Equity-method
investments (note 10)
|
5,170,893 | 6,651,601 | 203,040 | |||||||||
Financial
assets measured at fair value—noncurrent (note
6)
|
24,452 | - | - | |||||||||
Available-for-sale
financial assets—noncurrent (note 4)
|
2,123,631 | 595,750 | 18,185 | |||||||||
Hedging
derivative financial assets—noncurrent (note 6)
|
274,772 | 5,398 | 165 | |||||||||
Financial
assets carried at cost (note 5)
|
741,045 | 583,197 | 17,802 | |||||||||
Total
long-term investments
|
8,334,793 | 7,835,946 | 239,192 | |||||||||
Property, plant and equipment
(notes 11, 22 and 23):
|
||||||||||||
Land
|
6,273,615 | 6,273,615 | 191,502 | |||||||||
Buildings
|
70,998,565 | 73,598,148 | 2,246,586 | |||||||||
Machinery
and equipment
|
478,090,243 | 513,629,547 | 15,678,558 | |||||||||
Other
equipment
|
21,119,878 | 25,143,816 | 767,516 | |||||||||
576,482,301 | 618,645,126 | 18,884,162 | ||||||||||
Less:
accumulated depreciation
|
(228,944,207 | ) | (301,831,632 | ) | (9,213,420 | ) | ||||||
Construction
in progress
|
8,323,470 | 12,312,856 | 375,850 | |||||||||
Prepayments
for purchases of land and equipment
|
7,973,541 | 60,221,909 | 1,838,276 | |||||||||
Net
property, plant and equipment
|
363,835,105 | 389,348,259 | 11,884,868 | |||||||||
Intangible
assets:
|
||||||||||||
Goodwill
(note 12)
|
14,020,962 | 11,280,595 | 344,341 | |||||||||
Deferred
pension cost (note 17)
|
- | 9,509 | 290 | |||||||||
Core
technologies (note 12)
|
2,144,158 | 918,925 | 28,050 | |||||||||
Technology-related
fees (notes 12 and 24)
|
3,389,326 | 3,339,120 | 101,927 | |||||||||
Total
intangible assets
|
19,554,446 | 15,548,149 | 474,608 | |||||||||
Other
assets:
|
||||||||||||
Idle
assets, net (note 11)
|
1,842,099 | 2,612,320 | 79,741 | |||||||||
Refundable
deposits
|
81,764 | 215,869 | 6,590 | |||||||||
Deferred
charges
|
2,998,386 | 2,815,010 | 85,928 | |||||||||
Deferred
tax assets (note 19)
|
285,578 | 2,005,382 | 61,214 | |||||||||
Restricted
cash in bank (note 23)
|
33,500 | 25,501 | 779 | |||||||||
Long-term
prepayments for materials (note 24)
|
2,448,174 | - | - | |||||||||
Prepaid
pension cost (note 17)
|
167,123 | 236,112 | 7,207 | |||||||||
Total
other assets
|
7,856,624 | 7,910,194 | 241,459 | |||||||||
Total
Assets
|
617,459,240 | 566,935,638 | 17,305,728 |
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
Liabilities
and Stockholders’ Equity
|
||||||||||||
Current
liabilities:
|
||||||||||||
Short-term
borrowings (note 13)
|
136,594 | 4,857,260 | 148,268 | |||||||||
Accounts
payable
|
88,985,579 | 45,929,222 | 1,401,991 | |||||||||
Payables
to related parties (note 22)
|
7,591,890 | 12,249,003 | 373,901 | |||||||||
Accrued
expenses and other current liabilities
|
25,811,939 | 24,471,869 | 747,005 | |||||||||
Financial
liabilities measured at fair value—current (note
6)
|
318,875 | 28,831 | 880 | |||||||||
Equipment
and construction in progress payable
|
15,952,167 | 21,363,213 | 652,113 | |||||||||
Current
installments of long-term borrowings (notes 16 and
23)
|
30,242,288 | 30,491,872 | 930,765 | |||||||||
Current
installments of bonds payable (notes 14, 15 and 23)
|
5,342,890 | 13,093,382 | 399,676 | |||||||||
Liabilities
directly related to noncurrent assets held-for-sale (note
9)
|
138,681 | - | - | |||||||||
Total
current liabilities
|
174,520,903 | 152,484,652 | 4,654,599 | |||||||||
Long-term
liabilities:
|
||||||||||||
Financial
liabilities measured at fair value—noncurrent (note 6)
|
- | 40,711 | 1,243 | |||||||||
Bonds
payable, excluding current installments (notes 14 and 23)
|
13,500,000 | 15,000,000 | 457,875 | |||||||||
Convertible
bonds payable (notes 15 and 23)
|
8,845,355 | 2,690,900 | 82,140 | |||||||||
Long-term
borrowings, excluding current installments (notes
16 and 23)
|
119,670,211 | 96,650,642 | 2,950,264 | |||||||||
Hedging
derivative financial liabilities—noncurrent (note
6)
|
81,667 | 788,678 | 24,074 | |||||||||
Total
long-term liabilities
|
142,097,233 | 115,170,931 | 3,515,596 | |||||||||
Other
liabilities
|
21,239 | 21,319 | 651 | |||||||||
Total
liabilities
|
316,639,375 | 267,676,902 | 8,170,846 | |||||||||
Stockholders’ equity
(note 18):
|
||||||||||||
Capital
stock:
|
||||||||||||
Common
stock, NT$10 par value
|
78,177,055 | 85,057,196 | 2,596,374 | |||||||||
Capital
in advance
|
474,951 | - | - | |||||||||
Capital
surplus
|
113,808,167 | 113,651,334 | 3,469,210 | |||||||||
Retained
earnings:
|
||||||||||||
Legal
reserve
|
7,437,591 | 13,079,368 | 399,248 | |||||||||
Unappropriated
retained earnings
|
89,092,396 | 76,912,630 | 2,347,760 | |||||||||
96,529,987 | 89,991,998 | 2,747,008 | ||||||||||
Cumulative
translation adjustments
|
1,050,051 | 2,330,858 | 71,150 | |||||||||
Minimum
pension liability (note 17)
|
- | (40,252 | ) | (1,229 | ) | |||||||
Unrealized
gains (losses) on financial instruments
|
1,738,754 | (932,163 | ) | (28,454 | ) | |||||||
291,778,965 | 290,058,971 | 8,854,059 | ||||||||||
Minority
interests
|
9,040,900 | 9,199,765 | 280,823 | |||||||||
Total
stockholders’ equity
|
300,819,865 | 299,258,736 | 9,134,882 | |||||||||
Commitments and contingent
liabilities (note 24)
|
||||||||||||
Total
Liabilities and Stockholders’ Equity
|
617,459,240 | 566,935,638 | 17,305,728 |
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
Net sales (note
22)
|
293,106,770 | 480,183,626 | 423,928,193 | 12,940,421 | ||||||||||||
Cost of goods sold (note
22)
|
263,256,485 | 394,005,401 | 368,600,330 | 11,251,536 | ||||||||||||
Gross
profit
|
29,850,285 | 86,178,225 | 55,327,863 | 1,688,885 | ||||||||||||
Operating expenses (note
22):
|
||||||||||||||||
Selling
|
6,776,339 | 11,600,525 | 11,492,831 | 350,819 | ||||||||||||
General
and administrative
|
4,094,917 | 5,432,426 | 7,907,578 | 241,379 | ||||||||||||
Research
and development
|
4,762,767 | 5,870,518 | 5,335,196 | 162,857 | ||||||||||||
15,634,023 | 22,903,469 | 24,735,605 | 755,055 | |||||||||||||
Operating
income
|
14,216,262 | 63,274,756 | 30,592,258 | 933,830 | ||||||||||||
Non-operating
income and gains:
|
||||||||||||||||
Interest
income
|
1,136,209 | 1,693,005 | 1,845,712 | 56,340 | ||||||||||||
Investment
gains recognized by equity method, net (note 10)
|
- | 201,155 | - | - | ||||||||||||
Foreign
currency exchange gains, net
|
598,282 | - | - | - | ||||||||||||
Gains
on valuation of financial instruments (note 6)
|
- | 1,396,372 | 3,902,317 | 119,118 | ||||||||||||
Other
income (note 22)
|
488,256 | 987,020 | 1,709,071 | 52,169 | ||||||||||||
2,222,747 | 4,277,552 | 7,457,100 | 227,627 | |||||||||||||
Non-operating
expenses and losses:
|
||||||||||||||||
Interest
expenses
|
3,401,740 | 6,150,817 | 4,203,946 | 128,325 | ||||||||||||
Investment
losses recognized by equity method, net (note 10)
|
1,701,545 | - | 313,621 | 9,573 | ||||||||||||
Foreign
currency exchange losses, net
|
- | 1,271,735 | 4,994,189 | 152,448 | ||||||||||||
Depreciation
of idle assets
|
224,728 | 811,355 | 654,639 | 19,983 | ||||||||||||
Asset
impairment losses (notes 4, 5 and 11)
|
287,052 | 547,240 | 1,394,297 | 42,561 | ||||||||||||
Losses
on valuation of financial instruments (note 6)
|
608,572 | - | - | - | ||||||||||||
Other
losses
|
15,068 | 207,317 | 217,755 | 6,647 | ||||||||||||
6,238,705 | 8,988,464 | 11,778,447 | 359,537 | |||||||||||||
Earnings
before income tax and cumulative effect of changes in accounting
principles
|
10,200,304 | 58,563,844 | 26,270,911 | 801,920 | ||||||||||||
Income tax expense (note
19)
|
1,068,324 | 2,087,910 | 4,629,066 | 141,302 | ||||||||||||
Income
before cumulative effect of changes in accounting
principles
|
9,131,980 | 56,475,934 | 21,641,845 | 660,618 | ||||||||||||
Cumulative effect of changes in
accounting principles (note 2(za))
|
(38,585 | ) | - | - | - | |||||||||||
Net
income
|
9,093,395 | 56,475,934 | 21,641,845 | 660,618 | ||||||||||||
Attributable
to:
|
||||||||||||||||
Equity
holders of the parent company
|
9,103,472 | 56,417,766 | 21,267,386 | 649,188 | ||||||||||||
Minority
interests
|
(10,077 | ) | 58,168 | 374,459 | 11,430 | |||||||||||
Net
income
|
9,093,395 | 56,475,934 | 21,641,845 | 660,618 |
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
Earnings per share—Basic
(note 20):
|
||||||||||||||||
Income
before cumulative effect of changes in accounting
principles
|
1.42 | 7.22 | 2.50 | 0.08 | ||||||||||||
Cumulative
effect of changes in accounting principles
|
(0.01 | ) | - | - | - | |||||||||||
Basic
EPS—net income
|
1.41 | 7.22 | 2.50 | 0.08 | ||||||||||||
Basic
EPS—retroactively adjusted
|
1.27 | 6.68 | ||||||||||||||
Earnings per share—Diluted
(note 20):
|
||||||||||||||||
Income
before cumulative effect of changes in accounting
principles
|
1.32 | 6.86 | 2.41 | 0.07 | ||||||||||||
Cumulative
effect of changes in accounting principles
|
(0.01 | ) | - | - | - | |||||||||||
Diluted
EPS—net income
|
1.31 | 6.86 | 2.41 | 0.07 | ||||||||||||
Diluted
EPS—retroactively adjusted
|
1.18 | 6.35 |
Capital
stock
|
Retained
earnings
|
|||||||||||||||||||||||||||||||||||||||||||||||
Number
of
shares
|
Amount
|
Capital
in
advance
|
Capital
surplus
|
Legal
reserve
|
Special
reserve
|
Unappropriated
retained
earnings
|
Cumulative
translation
adjustments
|
Minimum
pension
liability
|
Unrealized
gains
(losses)
on
financial
instruments
|
Minority
interests
|
Total
|
|||||||||||||||||||||||||||||||||||||
Balance
at January 1, 2006
|
5,830,548 | 58,305,471 | - | 57,664,144 | 4,964,545 | 201,809 | 34,507,005 | 59,213 | - | - | 117,305 | 155,819,492 | ||||||||||||||||||||||||||||||||||||
Appropriation
for legal reserve
|
- | - | - | - | 1,562,699 | - | (1,562,699 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Issuance
of employee stock bonus
|
88,605 | 886,051 | - | - | - | - | (886,051 | ) | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Employees’
profit sharing—cash
|
- | - | - | - | - | - | (379,736 | ) | - | - | - | - | (379,736 | ) | ||||||||||||||||||||||||||||||||||
Remuneration
to directors and supervisors
|
- | - | - | - | - | - | (21,097 | ) | - | - | - | - | (21,097 | ) | ||||||||||||||||||||||||||||||||||
Cash
dividends
|
- | - | - | - | - | - | (1,749,164 | ) | - | - | - | - | (1,749,164 | ) | ||||||||||||||||||||||||||||||||||
Stock
dividends to shareholders
|
174,916 | 1,749,164 | - | - | - | - | (1,749,164 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Issuance
of new shares for merger
|
1,479,110 | 14,791,100 | - | 52,957,471 | - | - | - | - | - | - | - | 67,748,571 | ||||||||||||||||||||||||||||||||||||
Employee
stock options assumed from merger with QDI
|
- | - | - | 76,062 | - | - | - | - | - | - | - | 76,062 | ||||||||||||||||||||||||||||||||||||
Issuance
of stock for employee stock option exercised
|
224 | 2,242 | - | 6,390 | - | - | - | - | - | - | - | 8,632 | ||||||||||||||||||||||||||||||||||||
Adjustments
to capital surplus and unrealized gains (losses) on financial instruments
for changes in investees’ equity
|
- | - | - | (28,449 | ) | - | - | - | - | - | 11,912 | - | (16,537 | ) | ||||||||||||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | - | 9,103,472 | - | - | - | - | 9,103,472 | ||||||||||||||||||||||||||||||||||||
Minority
interests in net income of subsidiaries
|
- | - | - | - | - | - | - | - | - | - | (10,077 | ) | (10,077 | ) | ||||||||||||||||||||||||||||||||||
Unrealized
gains on available-for-sale financial assets, net
|
- | - | - | - | - | - | - | - | - | 255,159 | - | 255,159 | ||||||||||||||||||||||||||||||||||||
Unrealized
losses on cash flow hedges, net
|
- | - | - | - | - | - | - | - | - | (239,889 | ) | - | (239,889 | ) | ||||||||||||||||||||||||||||||||||
Foreign
currency translation adjustments
|
- | - | - | - | - | - | - | 246,644 | - | - | - | 246,644 | ||||||||||||||||||||||||||||||||||||
Adjustments
for changes in minority interests
|
- | - | - | - | - | - | - | - | - | - | 234,786 | 234,786 | ||||||||||||||||||||||||||||||||||||
Balance
at December 31, 2006
|
7,573,403 | 75,734,028 | - | 110,675,618 | 6,527,244 | 201,809 | 37,262,566 | 305,857 | - | 27,182 | 342,014 | 231,076,318 | ||||||||||||||||||||||||||||||||||||
Capital
stock
|
Retained
earnings
|
|||||||||||||||||||||||||||||||||||||||||||||||
Number
of
shares
|
Amount
|
Capital
in
advance
|
Capital
surplus
|
Legal
reserve
|
Special
reserve
|
Unappropriated
retained
earnings
|
Cumulative
translation
adjustments
|
Minimum
pension
liability
|
Unrealized
gains
(losses)
on
financial
instruments
|
Minority
interests
|
Total
|
|||||||||||||||||||||||||||||||||||||
Balance
at January 1, 2007
|
7,573,403 | 75,734,028 | - | 110,675,618 | 6,527,244 | 201,809 | 37,262,566 | 305,857 | - | 27,182 | 342,014 | 231,076,318 | ||||||||||||||||||||||||||||||||||||
Appropriation
for legal reserve
|
- | - | - | - | 910,347 | - | (910,347 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Issuance
of employee stock bonus
|
57,352 | 573,519 | - | - | - | - | (573,519 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Employees’
profit sharing—cash
|
- | - | - | - | - | - | (245,793 | ) | - | - | - | - | (245,793 | ) | ||||||||||||||||||||||||||||||||||
Remuneration
to directors and supervisors
|
- | - | - | - | - | - | (30,500 | ) | - | - | - | - | (30,500 | ) | ||||||||||||||||||||||||||||||||||
Cash
dividends
|
- | - | - | - | - | - | (1,514,793 | ) | - | - | - | - | (1,514,793 | ) | ||||||||||||||||||||||||||||||||||
Stock
dividends to shareholders
|
151,479 | 1,514,793 | - | - | - | - | (1,514,793 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Reversal
of special reserve
|
- | - | - | - | - | (201,809 | ) | 201,809 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Issuance
of stock for conversion of bonds
|
34,104 | 341,037 | 460,668 | 2,901,626 | - | - | - | - | - | - | - | 3,703,331 | ||||||||||||||||||||||||||||||||||||
Deferred
compensation cost for employee stock options
|
- | - | - | 3,890 | - | - | - | - | - | - | - | 3,890 | ||||||||||||||||||||||||||||||||||||
Issuance
of stock for employee stock option exercised
|
1,368 | 13,678 | 14,283 | 98,530 | - | - | - | - | - | - | - | 126,491 | ||||||||||||||||||||||||||||||||||||
Adjustments
to capital surplus and unrealized gains (losses) on financial instruments
for changes in investees’ equity
|
- | - | - | 128,503 | - | - | - | - | - | (11,291 | ) | - | 117,212 | |||||||||||||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | - | 56,417,766 | - | - | - | - | 56,417,766 | ||||||||||||||||||||||||||||||||||||
Minority
interests in net income of subsidiaries
|
- | - | - | - | - | - | - | - | - | - | 58,168 | 58,168 | ||||||||||||||||||||||||||||||||||||
Unrealized
gains on available-for-sale financial assets, net
|
- | - | - | - | - | - | - | - | - | 1,326,391 | - | 1,326,391 | ||||||||||||||||||||||||||||||||||||
Unrealized
gains on cash flow hedges, net
|
- | - | - | - | - | - | - | - | - | 396,472 | - | 396,472 | ||||||||||||||||||||||||||||||||||||
Foreign
currency translation adjustments
|
- | - | - | - | - | - | - | 744,194 | - | - | - | 744,194 | ||||||||||||||||||||||||||||||||||||
Adjustments
for changes in minority interests
|
- | - | - | - | - | - | - | - | - | - | 8,640,718 | 8,640,718 | ||||||||||||||||||||||||||||||||||||
Balance
at December 31, 2007
|
7,817,706 | 78,177,055 | 474,951 | 113,808,167 | 7,437,591 | - | 89,092,396 | 1,050,051 | - | 1,738,754 | 9,040,900 | 300,819,865 |
Capital
stock
|
Retained
earnings
|
|||||||||||||||||||||||||||||||||||||||||||||||
Number
of
shares
|
Amount
|
Capital
in
advance
|
Capital
surplus
|
Legal
reserve
|
Special
reserve
|
Unappropriated
retained
earnings
|
Cumulative
translation
adjustments
|
Minimum
pension
liability
|
Unrealized
gains
(losses)
on
financial
instruments
|
Minority
interests
|
Total
|
|||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||
Balance
at January 1, 2008
|
7,817,706 | 78,177,055 | 474,951 | 113,808,167 | 7,437,591 | - | 89,092,396 | 1,050,051 | - | 1,738,754 | 9,040,900 | 300,819,865 | ||||||||||||||||||||||||||||||||||||
Appropriation
for legal reserve
|
- | - | - | - | 5,641,777 | - | (5,641,777 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Issuance
of employee stock bonus
|
243,725 | 2,437,247 | - | - | - | - | (2,437,247 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Employees’
profit sharing—cash
|
- | - | - | - | - | - | (1,624,832 | ) | - | - | - | - | (1,624,832 | ) | ||||||||||||||||||||||||||||||||||
Remuneration
to directors and supervisors
|
- | - | - | - | - | - | (138,604 | ) | - | - | - | - | (138,604 | ) | ||||||||||||||||||||||||||||||||||
Cash
dividends
|
- | - | - | - | - | - | (19,670,577 | ) | - | - | - | - | (19,670,577 | ) | ||||||||||||||||||||||||||||||||||
Stock
dividends to shareholders
|
393,412 | 3,934,115 | - | - | - | - | (3,934,115 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Issuance
of stock for conversion of bonds
|
48,829 | 488,289 | (460,668 | ) | 100,418 | - | - | - | - | - | - | - | 128,039 | |||||||||||||||||||||||||||||||||||
Issuance
of stock for employee stock option exercised
|
2,049 | 20,490 | (14,283 | ) | 20,402 | - | - | - | - | - | - | - | 26,609 | |||||||||||||||||||||||||||||||||||
Adjustments
to capital surplus and unrealized gains (losses) on financial instruments
for changes in investees’ equity
|
- | - | - | (277,653 | ) | - | - | - | - | - | (202,187 | ) | - | (479,840 | ) | |||||||||||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | - | 21,267,386 | - | - | - | - | 21,267,386 | ||||||||||||||||||||||||||||||||||||
Minority
interests in net income of subsidiaries
|
- | - | - | - | - | - | - | - | - | - | 374,459 | 374,459 | ||||||||||||||||||||||||||||||||||||
Unrealized
losses on available-for-sale financial assets, net
|
- | - | - | - | - | - | - | - | - | (1,763,605 | ) | - | (1,763,605 | ) | ||||||||||||||||||||||||||||||||||
Unrealized
losses on cash flow hedges, net
|
- | - | - | - | - | - | - | - | - | (705,125 | ) | - | (705,125 | ) | ||||||||||||||||||||||||||||||||||
Foreign
currency translation adjustments
|
- | - | - | - | - | - | - | 1,280,807 | - | - | - | 1,280,807 | ||||||||||||||||||||||||||||||||||||
Minimum
pension liability
|
- | - | - | - | - | - | - | - | (40,252 | ) | - | - | (40,252 | ) | ||||||||||||||||||||||||||||||||||
Adjustments
for changes in minority interests
|
- | - | - | - | - | - | - | - | - | - | (215,594 | ) | (215,594 | ) | ||||||||||||||||||||||||||||||||||
Balance
at December 31, 2008
|
8,505,720 | 85,057,196 | - | 113,651,334 | 13,079,368 | - | 76,912,630 | 2,330,858 | (40,252 | ) | (932,163 | ) | 9,199,765 | 299,258,736 | ||||||||||||||||||||||||||||||||||
Balance
at December 31,
2008 (in US$) |
2,596,374 | - | 3,469,210 | 399,248 | - | 2,347,760 | 71,150 | (1,229 | ) | (28,454 | ) | 280,823 | 9,134,882 |
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||
Net
income
|
9,093,395 | 56,475,934 | 21,641,845 | 660,618 | ||||||||||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||||||
Depreciation
|
50,632,568 | 77,546,880 | 78,411,867 | 2,393,525 | ||||||||||||
Amortization
of intangible assets and deferred charges
|
2,127,650 | 4,158,688 | 2,776,565 | 84,755 | ||||||||||||
Provision
for inventory devaluation
|
3,309,176 | 361,874 | 5,008,379 | 152,881 | ||||||||||||
Unrealized
foreign currency exchange losses (gains), net
|
(393,310 | ) | 880,974 | 2,298,557 | 70,163 | |||||||||||
Asset
impairment losses
|
287,052 | 547,240 | 1,394,297 | 42,561 | ||||||||||||
Losses
(gains) on valuation of financial instruments
|
675,381 | (381,052 | ) | (1,075,326 | ) | (32,824 | ) | |||||||||
Cumulative
effect of changes in accounting principles
|
38,585 | - | - | - | ||||||||||||
Investment
losses (gains) recognized by equity method, net
|
1,701,545 | (201,155 | ) | 313,621 | 9,573 | |||||||||||
Proceeds
from cash dividends
|
26,903 | 84,342 | 142,368 | 4,346 | ||||||||||||
Losses
(gains) on sale of investment securities
|
(25,172 | ) | (25,014 | ) | 142,267 | 4,343 | ||||||||||
Amortization
of premium for convertible bonds and commercial paper
|
(549,683 | ) | (375,095 | ) | (3,732 | ) | (114 | ) | ||||||||
Losses
(gains) from disposal and write-off of property, plant and equipment, and
others
|
(2,224 | ) | 52,687 | 33,631 | 1,027 | |||||||||||
Changes
in operating assets and liabilities, net of effects from merger with QDI
in 2006:
|
||||||||||||||||
Decrease
(increase) in accounts receivable (including related
parties)
|
598,788 | (14,211,494 | ) | 51,485,303 | 1,571,590 | |||||||||||
Decrease
(increase) in inventories, net
|
(13,975,020 | ) | 7,042,635 | 6,823,368 | 208,283 | |||||||||||
Decrease
(increase) in deferred tax assets, net
|
(159,586 | ) | (2,435,780 | ) | 2,411,066 | 73,598 | ||||||||||
Decrease
(increase) in prepayments (including long-term prepayments for materials)
and other current assets
|
1,191,679 | (1,854,495 | ) | 1,625,308 | 49,612 | |||||||||||
Increase
(decrease) in accounts payable (including related parties)
|
14,569,014 | 17,881,742 | (39,799,729 | ) | (1,214,888 | ) | ||||||||||
Increase
(decrease) in accrued expenses and other current
liabilities
|
(532,219 | ) | 11,474,524 | (1,453,395 | ) | (44,365 | ) | |||||||||
Increase
in prepaid pension assets
|
(87,790 | ) | (96,521 | ) | (118,750 | ) | (3,625 | ) | ||||||||
Net
cash provided by operating activities
|
68,526,732 | 156,926,914 | 132,057,510 | 4,031,059 | ||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||
Acquisition
of property, plant and equipment
|
(87,246,727 | ) | (65,136,668 | ) | (98,355,181 | ) | (3,002,295 | ) | ||||||||
Proceeds
from disposals of property, plant and equipment, noncurrent assets
held-for-sale, and idle assets
|
279,615 | 138,003 | 1,344,356 | 41,036 | ||||||||||||
Proceeds
from disposal of and return of investments in available-for-sale financial
assets
|
12,771 | 205,564 | 270,250 | 8,249 | ||||||||||||
Purchase
of long-term investments
|
(8,396,518 | ) | (1,209,033 | ) | (2,889,016 | ) | (88,187 | ) | ||||||||
Proceeds
from disposal of and return of long-term investments
|
60,373 | 76,166 | 378 | 12 | ||||||||||||
Decrease
(increase) in restricted cash in bank
|
(11,000 | ) | 9,700 | 7,999 | 244 | |||||||||||
Increase
in intangible assets and deferred charges
|
(2,488,687 | ) | (2,029,574 | ) | (1,502,092 | ) | (45,851 | ) | ||||||||
Decrease
(increase) in refundable deposits
|
49,054 | 219,069 | (134,105 | ) | (4,094 | ) | ||||||||||
Cash
increase (decrease) resulting from change in consolidated
entity
|
(32,528 | ) | 1,603,665 | - | - | |||||||||||
Cash
assumed from merger with QDI
|
14,473,057 | - | - | - | ||||||||||||
Net
cash used in investing activities
|
(83,300,590 | ) | (66,123,108 | ) | (101,257,411 | ) | (3,090,886 | ) | ||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||
Increase
(decrease) in short-term borrowings
|
(1,618,585 | ) | (3,592,871 | ) | 4,720,666 | 144,099 | ||||||||||
Increase
in guarantee deposits
|
3,275 | 3,054 | 2,912 | 89 | ||||||||||||
Repayment
of long-term borrowings and bonds payable
|
(19,753,513 | ) | (76,843,555 | ) | (57,993,509 | ) | (1,770,254 | ) | ||||||||
Proceeds
from long-term borrowings and bonds payable
|
55,791,101 | 36,845,178 | 37,299,393 | 1,138,565 | ||||||||||||
Proceeds
from issuance of stock for employee stock options
exercised
|
8,632 | 126,491 | 26,609 | 812 | ||||||||||||
Cash
dividends
|
(1,749,164 | ) | (1,514,793 | ) | (19,670,577 | ) | (600,445 | ) | ||||||||
Remuneration
to directors and supervisors, and employees’ profit
sharing
|
(400,833 | ) | (276,293 | ) | (1,763,436 | ) | (53,829 | ) | ||||||||
Proceeds
from issuance of subsidiary shares to minority interests
|
269,907 | 436,222 | 40,000 | 1,221 | ||||||||||||
Cash
dividends to minority interests and others
|
- | - | (97,667 | ) | (2,981 | ) | ||||||||||
Net
cash provided by (used in) financing activities
|
32,550,820 | (44,816,567 | ) | (37,435,609 | ) | (1,142,723 | ) | |||||||||
Effect
of exchange rate change on cash
|
(114,687 | ) | (23,172 | ) | 180,600 | 5,513 | ||||||||||
Net
increase (decrease) in cash and cash equivalents
|
17,662,275 | 45,964,067 | (6,454,910 | ) | (197,036 | ) | ||||||||||
Cash
and cash equivalents at beginning of year
|
26,263,265 | 43,925,540 | 89,889,607 | 2,743,883 | ||||||||||||
Cash
and cash equivalents at end of year
|
43,925,540 | 89,889,607 | 83,434,697 | 2,546,847 | ||||||||||||
Supplemental
disclosures of cash flow information:
|
||||||||||||||||
Cash
paid for interest expense (excluding interest capitalized)
|
2,883,499 | 6,263,952 | 4,112,907 | 125,547 | ||||||||||||
Cash
paid for income taxes
|
1,232,844 | 930,586 | 5,179,223 | 158,096 | ||||||||||||
Additions
to property, plant and equipment:
|
||||||||||||||||
Increase
in property, plant and equipment
|
89,246,312 | 49,903,453 | 103,289,880 | 3,152,927 | ||||||||||||
Decrease
(increase) in construction-in-progress and prepayments
|
(1,999,585 | ) | 15,233,215 | (4,934,699 | ) | (150,632 | ) | |||||||||
87,246,727 | 65,136,668 | 98,355,181 | 3,002,295 | |||||||||||||
Supplementary
disclosure of non-cash investing and financing activities:
|
||||||||||||||||
Current
installments of long-term liabilities
|
41,889,820 | 35,585,178 | 43,585,254 | 1,330,441 | ||||||||||||
Issuance
of common stock for bond conversion rights exercised
|
- | 3,703,331 | 128,039 | 3,908 | ||||||||||||
Impact
of change in consolidated entities:
|
||||||||||||||||
Cash
|
(32,528 | ) | 1,603,665 | - | - | |||||||||||
Non-cash
assets
|
(68,195 | ) | 15,562,075 | - | - | |||||||||||
Liabilities
|
37,811 | (1,584,927 | ) | - | - | |||||||||||
Minority
interests
|
35,121 | (8,204,496 | ) | - | - | |||||||||||
(27,791 | ) | 7,376,317 | - | - | ||||||||||||
Cash
assumed from merger with QDI:
|
||||||||||||||||
Common
stock issued as consideration for merger
|
67,764,472 | |||||||||||||||
Employee
stock options assumed
|
73,383 | |||||||||||||||
Liabilities
assumed
|
122,887,762 | |||||||||||||||
Less:
non-cash assets acquired
|
(161,964,552 | ) | ||||||||||||||
Less:
goodwill
|
(14,288,008 | ) | ||||||||||||||
14,473,057 | ||||||||||||||||
|
(a)
|
Accounting
principles and consolidation policy
|
|
(b)
|
Revenue
recognition
|
|
(c)
|
Use
of estimates
|
|
(d)
|
Foreign
currency transactions and
translation
|
|
(e)
|
Asset
impairment
|
|
(f)
|
Cash
equivalents and restricted cash in
bank
|
|
(g)
|
Financial
instruments
|
|
(1)
|
Financial
assets and liabilities measured at fair value through profit or
loss: Financial instruments are classified into this category
if the purpose of acquisition is principally for selling or repurchasing
in the near term. Except for effective hedging derivative
financial instruments, all financial derivatives are included in this
category. Changes in fair values are charged to current
operations.
|
|
(2)
|
Available-for-sale
financial assets: These are measured at fair value, and any
changes, excluding impairment loss and unrealized foreign currency
exchange gain or loss, are reported as a separate component of
stockholders’ equity until realized. Realized gain or loss on
financial instruments is charged to current operations. If
there is objective evidence of impairment, an impairment loss is
recognized in profit or loss. If, in a subsequent period,
events or changes in circumstances indicate that the amount of impairment
loss decreases, the previously recognized impairment loss for equity
securities is reversed to the extent of the decrease and recorded as an
adjustment to equity, while for debt securities, the reversal is allowed
through profit or loss provided that the decrease is clearly attributable
to an event which occurs after the impairment loss is
recognized.
|
|
(3)
|
Financial
liabilities measured at amortized cost: Financial liabilities
not measured at fair value through profit or loss and not designated as
hedges are reported at amortized
cost.
|
|
(4)
|
Financial
assets carried at cost: Equity investments which cannot be
measured at fair value are recorded based on original cost. If
there is objective evidence that an impairment loss has been incurred on
unquoted equity instruments that are carried at cost, the amount of the
impairment loss is measured as the difference between the carrying amount
of the financial asset and the present value of estimated future cash
flows discounted at the current market rate of return for a similar
financial asset.
|
|
(5)
|
Hedging-purpose
derivative financial instruments: These are derivative
instruments entered into to hedge exposure to interest rate risks and
effective as hedges.
|
|
(h)
|
Derivative
financial instruments and hedging
activities
|
|
(i)
|
Allowance
for doubtful accounts
|
|
(j)
|
Inventories
|
|
(k)
|
Equity-method
investments
|
|
(l)
|
Property,
plant and equipment
|
|
(m)
|
Deferred
charges
|
|
(n)
|
Goodwill
and other intangible assets
|
|
(o)
|
Noncurrent
assets held-for-sale
|
|
(p)
|
Convertible
bonds assumed in a business
combination
|
|
(q)
|
Retirement
plans
|
|
(r)
|
Employee
bonuses and remuneration to
directors
|
|
Effective
January 1, 2008, employee bonuses and remuneration to directors are
estimated and charged to expense in accordance with Accounting Research
and Development Foundation (“ARDF”) Interpretation No. 2007-052, and
included in the cost of goods sold and operating expense, as
appropriate. The difference, if any, between the amount
approved by stockholders in the subsequent year and the amount estimated
in the current-year financial statements is accounted for as a change in
accounting estimate, and charged to profit or loss in the period during
which stockholders’ approval is obtained. No subsequent
adjustment to compensation expense is made if the employee stock bonuses
were to be settled through the issuance of stock. The number
of
|
|
(s)
|
Share-based
payment transactions
|
|
The
Company adopted ROC SFAS No. 39, “Share-based Payment,” for share-based
payment arrangements with grant date on or after January 1,
2008.
|
|
An
equity-settled share-based payment transaction is measured based on the
fair value of the award at the grant date, and recognized as expenses over
the vesting period with a corresponding increase in equity. The
vesting period is estimated based on the vesting conditions under the
share-based payment arrangement. Vesting conditions include
service conditions and performance conditions (including market
conditions). In estimating the fair value of an equity-settled
share-based award, only the effect of market conditions is taken into
consideration. A cash-settled share-based payment transaction
is measured at the balance sheet date and settlement date based on the
fair value of the award as of those dates and is recorded as a liability
incurred for the goods and services received. Changes in fair
values are charged to current operations. The fair value of
share-based award is estimated using the Black-Scholes option-pricing
model, taking into account the exercise price, current market price of the
underlying shares and management’s best estimate of the expected term,
expected volatility, expected dividends, and risk-free interest
rate.
|
|
For
all period presented, the Company did not have any share-based payment
arrangement within the scope of ROC SFAS No.
39.
|
|
(t)
|
Employee
stock options assumed in a business
combination
|
|
(u)
|
Government
grants
|
|
(v)
|
Income
taxes
|
|
(w)
|
Investment
tax credits
|
|
(x)
|
Earnings
per common share (“EPS”)
|
|
(y)
|
Convenience
translation into U.S. dollars
|
|
(z)
|
Reclassifications
|
|
(za)
|
Accounting
changes
|
For the year ended December 31,
2006
|
||||||||
Nature of accounting
changes
|
Increase
(decrease)
in
net income
|
Increase
(decrease)
in
basic EPS
|
||||||
NT$
|
NT$
|
|||||||
(in
thousands, except for per share data)
|
||||||||
Accounting
for financial instruments
|
(183,363 | ) | (0.024 | ) | ||||
Accounting
for investor-level goodwill
|
112,969 | 0.015 | ||||||
(70,394 | ) | (0.009 | ) |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Cash
and bank deposits
|
65,564,544 | 63,880,848 | 1,949,965 | |||||||||
Government
bonds
|
24,325,063 | 19,553,849 | 596,882 | |||||||||
89,889,607 | 83,434,697 | 2,546,847 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Current:
|
||||||||||||
Publicly
listed stocks
|
1,347,131 | 470,301 | 14,356 | |||||||||
Noncurrent:
|
||||||||||||
Publicly
listed stocks
|
2,123,631 | 595,750 | 18,185 |
In
2008, the Company determined its investment in certain publicly listed
stocks was impaired due to a significant and other-than-temporary decline
in fair value. As a result, the Company recognized impairment
losses of NT$386,810 (US$11,807) thousand for the year ended December 31,
2008.
|
||
5.
|
Financial
Assets Carried at
Cost—noncurrent
|
December 31,
|
|||||
2007
|
2008
|
||||
NT$
|
NT$
|
US$
|
|||
(in
thousands)
|
|||||
Non-publicly
listed stocks
|
741,045
|
583,197
|
17,802
|
In 2008, the Company determined its investment in certain non-publicly listed stocks was impaired due to a significant and other-than-temporary decline in value. As a result, the Company recognized impairment loss of NT$397,364 (US$12,130) thousand for the year ended December 31, 2008. | ||
6.
|
Derivative Financial Instruments and Hedging Policy | |
(a)
|
Derivative
financial
instruments
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Derivative
financial assets:
|
||||||||||||
Foreign
currency forward contracts
|
168,868 | 1,067,531 | 32,586 | |||||||||
Interest
rate swap contracts
|
299,224 | 5,398 | 165 | |||||||||
Derivative
financial liabilities:
|
||||||||||||
Foreign
currency forward contracts
|
318,875 | 28,831 | 880 | |||||||||
Interest
rate swap contracts
|
81,667 | 829,389 | 25,317 |
The
aforementioned derivative financial instruments were classified in the
consolidated balance sheets under the current and noncurrent portion of
financial assets and liabilities measured at fair value, except for
derivative financial instruments designated as hedges, which were
classified under hedging derivative financial assets and
liabilities—noncurrent.
|
December 31, 2007
|
||||
Contract item
|
Maturity date
|
Contract amount
|
||
(in
thousands)
|
||||
Sell
USD / Buy NTD
|
Jan.
2008 – Feb. 2008
|
USD1,665,000
/ NTD53,698,655
|
||
Sell
USD / Buy YEN
|
Jan.
2008 – Apr. 2008
|
USD11,000
/ YEN1,252,557
|
||
Sell
NTD / Buy YEN
|
Jan.
2008 – Mar. 2008
|
NTD14,851,446
/ YEN51,189,498
|
December 31, 2008
|
||||
Contract item
|
Maturity date
|
Contract amount
|
||
(in
thousands)
|
||||
Sell
USD / Buy YEN
|
Jan.
2009 – Feb. 2009
|
USD33,500
/ YEN3,252,780
|
||
Sell
NTD / Buy YEN
|
Jan.
2009 – Mar. 2009
|
NTD14,983,792
/ YEN43,739,100
|
||
Sell
NTD / Buy USD
|
Jan.
2009
|
NTD1,001,650
/ USD30,000
|
||
Sell
USD / Buy EUR
|
Jan.
2009
|
USD21,033
/ EUR15,000
|
||
Sell
USD / Buy CNY
|
Jan.
2009 – May 2009
|
USD15,000
/ CNY102,847
|
||
Sell
CNY / Buy USD
|
Jan.
2009
|
CNY48,272
/ USD7,000
|
|
(b)
|
Hedge
accounting
|
December 31, 2007
|
||||||||
Hedged item
|
Hedging
instrument
|
Fair
value
of
hedging
instrument
|
Expected
period
of
cash flows
|
Expected
period
of
recognition
in earnings
|
||||
NT$
|
||||||||
(in
thousands)
|
||||||||
Bonds
payable with variable interest rate
|
Interest
rate swap contracts
|
(27,226)
|
Jan.
2008–
Apr.
2009
|
Jan.
2008–
Apr.
2009
|
||||
Long-term
borrowings with variable interest rate
|
Interest
rate swap contracts
|
220,331
|
Jan.
2008–
Dec.
2012
|
Jan.
2008–
Dec.
2012
|
December 31, 2008
|
||||||||
Hedged item
|
Hedging
instrument
|
Fair
value
of
hedging
instrument
|
Expected
period
of
cash flows
|
Expected
period
of
recognition
in earnings
|
||||
NT$
|
||||||||
(in
thousands)
|
||||||||
Bonds
payable with variable interest rate
|
Interest
rate swap contracts
|
5,398
|
Jan.
2009–
Apr.
2009
|
Jan.
2009–
Apr.
2009
|
||||
Long-term
borrowings with variable interest rate
|
Interest
rate swap contracts
|
(788,678)
|
Jan.
2009–
Dec.
2012
|
Jan.
2009–
Dec.
2012
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Accounts
receivable
|
72,295,269 | 23,359,219 | 713,041 | |||||||||
Less:
allowance for doubtful accounts
|
(282,940 | ) | (97,608 | ) | (2,979 | ) | ||||||
allowance
for sales returns and discounts
|
(956,322 | ) | (1,036,287 | ) | (31,633 | ) | ||||||
71,056,007 | 22,225,324 | 678,429 |
December 31, 2007
|
||||||||||||
Underwriting
bank
|
Factoring
limit
|
Amount
advanced
|
Amount
sold
|
Amount
excluded
|
Principle
terms
|
Promissory
note
as
collateral
|
||||||
(in
thousands)
|
||||||||||||
Chinatrust
Commercial Bank
|
USD15,000
|
-
|
USD45,050
|
USD45,050
|
See
below
|
None
|
||||||
Mega
International Commercial Bank
|
USD15,000
|
-
|
USD60,853
|
USD60,853
|
See
below
|
None
|
||||||
Mizuho
Corporate Bank
|
USD95,000
|
-
|
USD299,957
|
USD299,957
|
See
below
|
None
|
||||||
Standard
Chartered Bank
|
USD80,000
|
USD12,003
|
USD164,701
|
USD164,701
|
See
below
|
None
|
December 31, 2008
|
||||||||||||
Underwriting
bank
|
Factoring
limit
|
Amount
advanced
|
Amount
sold
|
Amount
excluded
|
Principle
terms
|
Promissory
note
as
collateral
|
||||||
(in
thousands)
|
||||||||||||
Mizuho
Corporate Bank
|
USD95,000
|
-
|
USD123,831
|
USD123,831
|
See
below
|
None
|
||||||
Standard
Chartered Bank
|
USD36,000
|
USD12,000
|
USD330,795
|
USD330,795
|
See
below
|
None
|
||||||
Bank
of China
|
USD40,000
|
USD25,948
|
USD63,517
|
USD63,517
|
See
below
|
None
|
|
Note
(a):
|
Under
these facilities, the Company, irrevocably and without recourse,
transferred accounts receivable to the respective underwriting
banks.
|
|
Note
(b):
|
To
the extent of the amount sold to the underwriting banks, risks of
non-collection or default by customers in the event of financial
difficulties are borne by respective banks. The Company is not
responsible for the collection of receivables subject to these facilities,
or for any legal proceedings and costs thereof in recovering these
receivables.
|
|
Note
(c):
|
The
Company had informed its customers subject to the facilities to make
payment directly to respective the underwriting
banks.
|
|
Note
(d):
|
As
of December 31, 2007 and 2008, total outstanding receivables resulting
from the above transactions, net of fees charged by underwriting banks, of
NT$1,759,783 thousand and NT$2,493,779 (US$76,123) thousand, respectively,
were classified under other current financial
assets.
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Finished
goods
|
20,055,132 | 17,165,109 | 523,966 | |||||||||
Work-in-progress
|
15,508,156 | 11,773,496 | 359,386 | |||||||||
Raw
materials and spare parts
|
3,639,471 | 3,085,962 | 94,199 | |||||||||
39,202,759 | 32,024,567 | 977,551 | ||||||||||
Less:
provision for inventory obsolescence and devaluation
|
(3,771,733 | ) | (8,413,880 | ) | (256,834 | ) | ||||||
35,431,026 | 23,610,687 | 720,717 |
December
31, 2007
|
||||
NT$
(in
thousands)
|
||||
Deferred
charge—land use rights
|
38,876 | |||
Building
|
1,017,728 | |||
Machinery
and equipment
|
327,177 | |||
Allowance
for impairment loss
|
(100,043 | ) | ||
1,283,738 | ||||
Liabilities
directly related to the noncurrent assets
|
(138,681 | ) |
December 31,
|
||||||||||||||||||||
2007
|
2008
|
|||||||||||||||||||
Ownership
interest
|
Amount
|
Ownership
interest
|
Amount
|
|||||||||||||||||
%
|
NT$
|
%
|
NT$
|
US$
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Qisda
Corporation (“Qisda”) (formerly
BenQ Corporation)
|
5 | 1,586,885 | 10 | 2,713,352 | 82,825 | |||||||||||||||
Cando
Corporation (“Cando”)
|
21 | 1,206,015 | 18 | 1,138,212 | 34,744 | |||||||||||||||
Nano
Electro-Optical Technology Co., Ltd (“Nano-Op”)
|
16 | 702,807 | 16 | 682,472 | 20,832 | |||||||||||||||
Forhouse
Corporation (“Forhouse”)
|
- | - | 15 | 457,230 | 13,957 | |||||||||||||||
Wellypower
Optronics Corporation Ltd. (“Wellypower”)
|
9 | 478,414 | 9 | 437,848 | 13,365 | |||||||||||||||
Asia
Pacific Genesis Venture Capital Fund L.P. (“Asia Pacific
VC”)
|
11 | 356,508 | 11 | 271,451 | 8,286 | |||||||||||||||
Entire
Technology Co., Ltd. (“Entire”)
|
13 | 266,451 | 12 | 270,944 | 8,271 | |||||||||||||||
Raydium
Semiconductor Corp. (“Raydium”)
|
16 | 192,170 | 16 | 268,685 | 8,202 | |||||||||||||||
Daxin
Materials Corp. (“Daxin”)
|
35 | 206,632 | 35 | 190,070 | 5,802 | |||||||||||||||
Light
House Technology Co., Ltd. (“LHTC”)
|
20 | 127,890 | 17 | 165,226 | 5,044 | |||||||||||||||
Apower
Optronics Corporation (“Apower”)
|
5 | 46,687 | 5 | 34,840 | 1,063 | |||||||||||||||
Dazzo
Technology Corporation (“Dazzo”)
|
- | - | 26 | 19,948 | 609 | |||||||||||||||
Verticil
Electronic Corp. (“Verticil”)
|
- | - | 30 | 1,323 | 40 | |||||||||||||||
Sita
Technology Corp. (“Sita”)
|
45 | 434 | - | - | - | |||||||||||||||
Patentop
Ltd. (“Patentop”)
|
41 | - | 41 | - | - | |||||||||||||||
5,170,893 | 6,651,601 | 203,040 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Qisda
|
2,855,336 | 1,194,908 | 36,475 | |||||||||
Nano-Op
|
821,909 | 269,966 | 8,241 | |||||||||
Forhouse
|
- | 293,500 | 8,959 | |||||||||
Wellypower
|
1,184,020 | 227,288 | 6,938 | |||||||||
4,861,265 | 1,985,662 | 60,613 |
For the year ended December, 31,
2007
|
||||||||||||||||||||
Beginning
balance
|
Current-
period
change
|
Effect of
disposal
or
change
in
consolidated
entity
|
Amortization
or
realization
|
Ending
balance
|
||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Amortizable
assets
|
(559,893 | ) | - | 478,335 | 49,706 | (31,852 | ) | |||||||||||||
Goodwill
|
607,849 | 51,105 | - | - | 658,954 | |||||||||||||||
Other
assets
|
288,037 | - | 28,207 | (54,642 | ) | 261,602 | ||||||||||||||
335,993 | 51,105 | 506,542 | (4,936 | ) | 888,704 |
For the year ended December 31,
2008
|
||||||||||||||||||||
Beginning
balance
|
Current-
period
change
|
Amortization
or
realization
|
Ending balance
|
|||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
US$
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Amortizable
assets
|
(31,852 | ) | (508,138 | ) | 14,452 | (525,538 | ) | (16,042 | ) | |||||||||||
Goodwill
|
658,954 | - | - | 658,954 | 20,115 | |||||||||||||||
Other
assets
|
261,602 | (103,796 | ) | 4,859 | 162,665 | 4,965 | ||||||||||||||
888,704 | (611,934 | ) | 19,311 | 296,081 | 9,038 |
For the years ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Buildings
|
68,827 | 230,051 | 351,979 | 10,744 | ||||||||||||
Machinery
and equipment
|
574,833 | 441,593 | 1,010,719 | 30,852 | ||||||||||||
643,660 | 671,644 | 1,362,698 | 41,596 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Cost:
|
||||||||||||
Land
|
478,214 | 478,214 | 14,598 | |||||||||
Buildings
|
544,421 | 544,421 | 16,618 | |||||||||
Machinery
and other equipment
|
4,713,325 | 8,845,770 | 270,017 | |||||||||
5,735,960 | 9,868,405 | 301,233 | ||||||||||
Less:
accumulated depreciation
|
(3,241,491 | ) | (6,377,846 | ) | (194,684 | ) | ||||||
2,494,469 | 3,490,559 | 106,549 | ||||||||||
Less:
allowance for devaluation of idle assets
|
(652,370 | ) | (878,239 | ) | (26,808 | ) | ||||||
1,842,099 | 2,612,320 | 79,741 |
December 31, 2007
|
||||||||||||||||||||
Beginning
balance
|
Additions
|
Adjustments
|
Amortization
|
Ending
balance
|
||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Goodwill
|
14,288,008 | - | (267,046 | ) | - | 14,020,962 | ||||||||||||||
Core
technologies
|
3,369,392 | - | - | (1,225,234 | ) | 2,144,158 | ||||||||||||||
Technology-related
fees
|
2,485,374 | 2,673,277 | - | (1,769,325 | ) | 3,389,326 | ||||||||||||||
20,142,774 | 2,673,277 | (267,046 | ) | (2,994,559 | ) | 19,554,446 |
December 31, 2008
|
||||||||||||||||||||||||
Beginning
balance
|
Additions
|
Adjustments
|
Amortization
|
Ending balance
|
||||||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
Goodwill
|
14,020,962 | - | (2,740,367 | ) | - | 11,280,595 | 344,341 | |||||||||||||||||
Core
technologies
|
2,144,158 | - | - | (1,225,233 | ) | 918,925 | 28,050 | |||||||||||||||||
Technology-related
fees
|
3,389,326 | 765,896 | - | (816,102 | ) | 3,339,120 | 101,927 | |||||||||||||||||
19,554,446 | 765,896 | (2,740,367 | ) | (2,041,335 | ) | 15,538,640 | 474,318 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Short-term
borrowings
|
136,594 | 4,857,260 | 148,268 | |||||||||
Unused
available balance
|
24,203,785 | 38,760,054 | 1,183,152 |
14.
|
Bonds
Payable
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Secured
bonds payable:
|
||||||||||||
Secured
Bond 1
|
5,000,000 | 2,500,000 | 76,313 | |||||||||
Secured
Bond 2
|
6,000,000 | 6,000,000 | 183,150 | |||||||||
Secured
Bond 3
|
5,000,000 | 5,000,000 | 152,625 | |||||||||
Secured
Bond 4
|
- | 7,000,000 | 213,675 | |||||||||
16,000,000 | 20,500,000 | 625,763 | ||||||||||
Less:
current portion
|
(2,500,000 | ) | (5,500,000 | ) | (167,888 | ) | ||||||
13,500,000 | 15,000,000 | 457,875 | ||||||||||
Interest
payable
|
157,952 | 224,051 | 6,839 | |||||||||
Unused
available balance
|
7,000,000 | - | - |
NT$
|
US$
|
||||
(in
thousands)
|
|||||
2009
|
5,500,000
|
167,888
|
|||
2010
|
5,500,000
|
167,888
|
|||
2011
|
6,000,000
|
183,150
|
|||
2012
|
3,500,000
|
106,837
|
|||
20,500,000
|
625,763
|
Secured Bond 1
|
Secured Bond 2
|
Secured Bond 3
|
Secured Bond 4
|
||||
Par
value
|
NT$6,000,000
thousand
|
NT$6,000,000
thousand
|
NT$5,000,000
thousand
|
NT$7,000,000
thousand
|
|||
Issue
date
|
Apr.
23 – 24, 2004
|
Jun.
6 – 13, 2005
|
Mar.
21, 2006
|
Aug.
22, 2008
|
|||
Issue
price
|
At
par value
|
At
par value
|
At
par value
|
At
par value
|
|||
Coupon
rate
|
As
stated below
|
Bond
I: 2.0000%
Bond
II: 1.9901%
|
Fixed
rate 1.948%
|
Fixed
rate 2.90%
|
|||
Duration
|
As
stated below
|
Jun.
6, 2005 –
Jun.
13, 2010
|
Mar.
21, 2006 –
Mar.
21, 2011
|
Aug.
22, 2008 –
Aug.
22, 2012
|
|||
Bank
that provided guarantee
|
Mega
International Commercial Bank and eleven other banks
|
Bank
of Taiwan and eight other banks
|
Mizuho
Corporate Bank and six other banks
|
Mizuho
Corporate Bank and three other banks
|
|||
Redemption
|
As
stated below
|
As
stated below
|
As
stated below
|
As
stated below
|
15.
|
Convertible
Bonds Payable
|
December 31, 2007
|
||||||||||||||||
TCB 1
|
TCB 2
|
ECB 3
|
Total
|
|||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Convertible
bonds payable
|
5,194,300 | 2,749,300 | 3,765,217 | 11,708,817 | ||||||||||||
Unamortized
premium (discount)
|
(114,162 | ) | 93,590 | - | (20,572 | ) | ||||||||||
5,080,138 | 2,842,890 | 3,765,217 | 11,688,245 | |||||||||||||
Less:
current portion
|
- | (2,842,890 | ) | - | (2,842,890 | ) | ||||||||||
5,080,138 | - | 3,765,217 | 8,845,355 |
December 31, 2008
|
||||||||||||||||||||
TCB 1
|
TCB 2
|
ECB 3
|
Total
|
|||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
US$
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Convertible
bonds payable
|
5,194,300 | 2,690,900 | 2,427,861 | 10,313,061 | 314,806 | |||||||||||||||
Unamortized
premium (discount)
|
(28,779 | ) | - | - | (28,779 | ) | (878 | ) | ||||||||||||
5,165,521 | 2,690,900 | 2,427,861 | 10,284,282 | 313,928 | ||||||||||||||||
Less:
current portion
|
(5,165,521 | ) | - | (2,427,861 | ) | (7,593,382 | ) | (231,788 | ) | |||||||||||
- | 2,690,900 | - | 2,690,900 | 82,140 |
NT$
|
US$
|
|||||||
|
(in
thousands)
|
|||||||
2009
|
7,593,382 | 231,788 | ||||||
2010
|
2,690,900 | 82,140 | ||||||
10,284,282 | 313,928 |
Par
value
|
NT$10,500,000
thousand
|
Original
issue date
|
April
22, 2004
|
Original
issue price
|
102.5%
of par value
|
Coupon
rate
|
0%
|
Maturity
date
|
April
21, 2009
|
Collateral
|
None
|
Conversion
method
|
Bondholders
may convert bonds into AUO’s common shares at any time between May 22,
2004, and April 11, 2009.
|
Conversion
price
|
NT$70.49,
as adjusted, effective October 1, 2006, as a result of merger with
QDI. The conversion price was adjusted to NT$68.61 and NT$62.55
as a result of earnings distributions on August 10, 2007 and July 31,
2008, respectively.
|
Put
right
|
No
|
Redemption
terms
|
(a)
Unless previously redeemed, purchased and cancelled, or converted, bonds
will be redeemed on maturity at par.
(b)
Effective from the first anniversary of issuance to 40 days before
maturity, AUO may redeem the outstanding bonds at par if the closing price
of its common shares on the Taiwan Stock Exchange is at least 150% of the
conversion price for 30 consecutive trading days.
(c)
Effective from the first anniversary of issuance to 40 days before
maturity, AUO may redeem the outstanding bonds at par if the total amount
of outstanding bonds is less than NT$1,050,000
thousand.
|
Par
value
|
NT$6,000,000
thousand
|
Original
issue date
|
July
18, 2005
|
Original
issue price
|
At
par value
|
Coupon
rate
|
0%
|
Maturity
date
|
July
18, 2010
|
Collateral
|
None
|
Conversion
method
|
Bondholders
may convert bonds into AUO’s common shares at any time between August 18,
2005, and July 8, 2010.
|
Conversion
price
|
NT$44.10,
as adjusted, effective October 1, 2006, as a result of merger with
QDI. The conversion price was adjusted to NT$42.92 and NT$38.21
as a result of earnings distributions on August 10, 2007, and July 31,
2008, respectively.
|
Put
right
|
Bondholders
have the right to request AUO to repurchase bonds on July 18, 2008, at
par.
|
Redemption
terms
|
(a)
Unless previously redeemed, purchased and cancelled, or converted, bonds
will be redeemed on maturity at par. (b)
Effective from the first anniversary of issuance to 40 days before
maturity, AUO may redeem the outstanding bonds at par if the closing price
of its common shares on the Taiwan Stock Exchange is at least 150% of the
conversion price for 30 consecutive trading days.
(c)
Effective from the first anniversary of issuance to 40 days before
maturity, AUO may redeem the outstanding bonds at par if the total amount
of outstanding bonds is less than NT$600,000
thousand.
|
Par
value
|
US$294,500
thousand
|
Original
issue date
|
November
26, 2004
|
Original
issue price
|
At
par value
|
Coupon
rate
|
0%
|
Maturity
date
|
November
26, 2009
|
Collateral
|
None
|
Conversion
method
|
Bondholders
may, at any time from 41 days after issuance to the 10 days before
maturity, convert bonds into AUO’s common shares or certificates
exchangeable for common stock.
|
Conversion
price
|
NT$52.54,
as adjusted, effective October 1, 2006, as a result of merger with
QDI. The conversion price was adjusted to NT$51.13 and NT$47.30
as a result of earnings distributions on August 10, 2007, and July 31,
2008, respectively. For purposes of determining the number of
converted shares, a fixed exchange rate of US$1=NT$32.57 is
used.
|
Put
right
|
Bondholders
have the right to request AUO to repurchase bonds on January 26, 2007, at
par.
|
Redemption
terms
|
(a)
Unless previously redeemed, purchased and cancelled, or converted, bonds
will be redeemed on maturity at par.
(b)
Effective from the 26th month of issuance, AUO may, at any time after
January 26, 2007, redeem the bonds at par, in whole or in part, if the
closing price (translated into U.S. dollars at the prevailing rate) of its
common shares on the Taiwan Stock Exchange is at least 125% of the
conversion price (translated into U.S. dollars at the rate of NT$32.57 =
US$1) for 30 consecutive trading days.
(c)
AUO may redeem the total amount of outstanding bonds in whole at par in
the event that 95% of the bonds have been previously redeemed, converted,
or purchased and cancelled.
|
16.
|
Long-term
Borrowings
|
Bank
or
|
December 31,
|
|||||||||
agent bank
|
Purpose
|
Line of credit and key
terms
|
2007
|
2008
|
||||||
NT$
|
NT$
|
US$
|
||||||||
(in
thousands)
|
||||||||||
Bank
of Taiwan
|
As
stated below, see note (b)
|
From
Dec. 18, 2004, to Dec. 18, 2011, NT$49,000 million and US$150 million,
repayable in 9 semi-annual installments starting from Dec. 2007, annual
interest at 3.44%-6.49% in 2007 and 3.47%-3.85% in 2008.
|
47,875,888
|
35,949,387
|
1,097,356
|
|||||
Bank
of Taiwan
|
As
stated below, see note (b)
|
From
Dec. 29, 2005, to Dec. 29, 2012, NT$37,000 million, repayable in 9
semi-annual installments starting from Dec. 2008, annual interest at 3.45%
in 2007 and 3.49% in 2008.
|
37,000,000
|
32,885,600
|
1,003,834
|
|||||
Mega
International Commercial Bank (see note (a) below)
|
As
stated below, see note (b)
|
From
Jul. 14, 2006, to Jul. 14, 2013, NT$27,000 million, repayable in 10
semi-annual installments starting from Jan. 2009, annual interest at 3.40%
in 2007 and 3.06% in 2008.
|
14,000,000
|
27,000,000
|
824,176
|
Bank
or
|
December 31,
|
|||||||||
agent bank
|
Purpose
|
Line of credit and key
terms
|
2007
|
2008
|
||||||
NT$
|
NT$
|
US$
|
||||||||
(in
thousands)
|
||||||||||
Bank
of Taiwan
|
As
stated below, see note (b)
|
From
Sep. 13, 2006, to Sep. 13, 2014, NT$48,000 million, repayable in 9
semi-annual installments starting from Sep. 2010, with annual interest at
3.44% in 2008.
|
-
|
10,000,000
|
305,250
|
|||||
Industrial
Bank of Taiwan (see note (a) below)
|
As
stated below, see note (c)
|
From
Aug. 29, 2006, to Aug. 29, 2010, NT$1,000 million, repayable in 5
semi-annual installments starting from Aug. 2008, with interest at 2.73%
per annum.
|
1,000,000
|
825,000
|
25,183
|
|||||
Industrial
Bank of Taiwan
(see
note (a) below)
|
As
stated below, see note (c)
|
From
Nov. 17, 2005, to Nov. 17, 2009, NT$500 million, repayable in 6
semi-annual installments starting from May 2007, with interest at 2.68%
per annum.
|
350,000
|
200,000
|
6,105
|
|||||
Mega
International Commercial Bank
|
As
stated below, see note (b)
|
From
May 11, 2004, to May 11, 2011, NT$29,000 million, repayable in 9
semi-annual installments starting from May 2007. Early
repayment in full was made in May 2008, annual interest at 3.51% in
2007.
|
22,533,000
|
-
|
-
|
|||||
Chinatrust
Commercial Bank
|
As
stated below, see note (b)
|
From
Apr. 25, 2003, to Apr. 25, 2010, NT$11,500 million and US$100 million
repayable in 9 semi-annual installments starting from Apr.
2006. Early repayment in full was made in Apr. 2008, annual
interest at 3.57%-6.35% in 2007.
|
8,190,644
|
-
|
-
|
|||||
ABN-AMRO
Bank, Shanghai branch (Phase A)
|
As
stated below, see note (b)
|
From
Aug. 2, 2006, to Aug. 2, 2013, RMB1,400 million, repayable in 8
semi-annual installments starting from Feb. 2010, annual interest at
5.91%-6.89% in 2007 and 6.80%-6.97% in 2008.
|
2,355,797
|
3,507,358
|
107,062
|
Bank
or
|
December 31,
|
|||||||||
agent bank
|
Purpose
|
Line of credit and key
terms
|
2007
|
2008
|
||||||
NT$
|
NT$
|
US$
|
||||||||
(in
thousands)
|
||||||||||
ABN-AMRO
Bank, Shanghai branch (Phase B)
|
As
stated below, see note (b)
|
From
Aug. 2, 2006, to Aug. 2, 2013, RMB600 million, repayable in 9 semi-annual
installments starting from Aug. 2009, repayable in annual installments of
RMB60 million for the first 8 installments, with remaining balance payable
at final installment, annual interest at 5.83% in 2007 and 4.54%-5.43% in
2008.
|
1,822,409
|
2,862,073
|
87,365
|
|||||
ABN-AMRO
Bank, Shanghai branch
|
As
stated below, see note (b)
|
From
Aug. 2, 2006, to Aug. 2, 2013, US$75 million, repayable in 9 semi-annual
installments starting from Aug. 2009, annual interest at 5.56% in 2007 and
2.50% in 2008.
|
1,266,260
|
2,398,190
|
73,205
|
|||||
ABN-AMRO
Bank, Shanghai branch
|
As
stated below, see note (b)
|
From
Aug. 2, 2006, to Aug. 2, 2013, RMB800 million, repayable in 9 semi-annual
installments starting from Aug. 2009, annual interest at 5.83%-6.72% in
2007 and 5.43%-6.32% in 2008.
|
1,991,315
|
3,734,765
|
114,004
|
|||||
Citibank,
Shanghai branch
(Syndicated
loan II)
|
As
stated below, see note (b)
|
From
Nov. 30, 2004, to Nov. 30, 2009, RMB830 million, repayable in 4
semi-annual installments starting from May 2008, annual interest at 6.24%
in 2007 and 5.43%-6.89% in 2008.
|
2,460,188
|
664,819
|
20,294
|
|||||
Citibank,
Shanghai branch
(Syndicated
loan II)
|
As
stated below, see note (b)
|
From
Dec. 2, 2004, to Dec. 2, 2009, US$54 million, repayable in 6 semi-annual
installments starting from Jun. 2007, annual interest at 5.72% in 2007 and
2.82% in 2008.
|
1,168,856
|
591,075
|
18,043
|
|||||
Bank
of America, Shanghai branch
|
As
stated below, see note (b)
|
From
Dec. 30, 2004, to Dec. 30, 2009, RMB200 million, repayable in 6
semi-annual installments starting from Jun. 2007, annual interest at 6.89%
in 2007 and 6.89% in 2008. Early repayment in full was made in
Dec. 2008.
|
296,327
|
-
|
-
|
Bank
or
|
December 31,
|
|||||||||
agent bank
|
Purpose
|
Line of credit and key
terms
|
2007
|
2008
|
||||||
NT$
|
NT$
|
US$
|
||||||||
(in
thousands)
|
||||||||||
Standard
Chartered Bank, Shanghai branch
|
As
stated below, see note (b)
|
From
Nov. 27, 2007, to Nov. 27, 2012, US$42 million, first drawdown started
from Jan. 2008, repayable in 5 semi-annual installments starting from Nov.
2010, annual interest at 2.63% in 2008.
|
-
|
1,379,176
|
42,099
|
|||||
Agriculture
Bank of China, Shanghai Songjiang branch
|
As
stated below, see note (b)
|
From
Dec. 29, 2006, to Dec. 28, 2007, RMB771 million, repayable starting from
Jan. 2009, each drawdown repayable in two years, annual interest at
5.33%-6.80% in 2007 and 5.95%-6.10% in 2008.
|
3,171,010
|
1,316,967
|
40,200
|
|||||
Agriculture
Bank of China, Shanghai Songjiang branch
|
As
stated below, see note (b)
|
From
Sep. 11, 2008, to Sep. 10, 2009, RMB771 million, repayable starting from
Nov. 2010, each drawdown repayable in two years, annual interest at
5.10%-6.80% in 2008.
|
-
|
816,782
|
24,932
|
|||||
Citibank,
Shanghai branch
|
As
stated below, see note (b)
|
From
Mar. 30, 2005, to Mar. 30, 2010, US$80 million, repayable in 7 semi-annual
installments starting from Mar. 2007, annual interest at 5.73% in 2007 and
1.45% in 2008.
|
1,855,327
|
401,087
|
12,243
|
|||||
Citibank,
Shanghai branch
|
As
stated below, see note (b)
|
From
Mar. 30, 2005, to Mar. 30, 2010, RMB249 million, repayable in 7
semi-annual installments starting from Mar. 2007, annual interest at
5.67%-6.08% in 2007 and 7.00% in 2008.
|
790,557
|
256,360
|
7,825
|
|||||
Agricultural
Bank of China, Xiamen branch
|
As
stated below, see note (b)
|
From
Apr. 3, 2006, to Apr. 3, 2012, US$20 million, 25% payable in Apr. 2010,
50% in Apr. 2011, and the remaining principal due in Apr. 2012, annual
interest at 6.89%-7.74% in 2007 and 5.76%-7.56% in 2008.
|
555,613
|
600,575
|
18,333
|
Bank
or
|
December 31,
|
|||||||||
agent bank
|
Purpose
|
Line of credit and key
terms
|
2007
|
2008
|
||||||
NT$
|
NT$
|
US$
|
||||||||
(in
thousands)
|
||||||||||
Bank
of China, Xiamen branch
|
As
stated below, see note (b)
|
From
Apr. 28, 2007, to Apr. 28, 2012, RMB80 million, 25% payable in Dec. 2010,
25% in Dec. 2011 and 50% in Apr. 2012, annual interest at 6.89% in 2007
and 5.35%-6.32% in 2008.
|
355,592
|
384,368
|
11,733
|
|||||
Bank
of Communications, Xiamen branch
|
As
stated below, see note (b)
|
From
Dec. 20, 2006, to Dec. 20, 2009, RMB50 million, each drawdown due in three
years, repayable in full by Dec. 20, 2010, annual interest at 6.72% in
2007 and 4.86%-5.67% in 2008.
|
88,898
|
240,230
|
7,333
|
|||||
Bank
of Communications, Xiamen branch
|
As
stated below, see note (b)
|
From
Aug. 18, 2008, to Aug. 18, 2012, RMB100 million, repayable in 6
semi-annual installments starting from Feb. 2010, repayable in semi-annual
installments of RMB15 million for the first 5 installments, with the
remaining balance payable at final installment, annual interest at
5.76%-5.94% in 2008.
|
-
|
144,138
|
4,400
|
|||||
Agricultural
Bank of China, Xiamen branch
|
As
stated below, see note (b)
|
From
Feb. 22, 2008, to Feb. 21, 2011, US$5 million, 3-year term, one-time
repayment upon maturity, annual interest at 6.75% in 2008.
|
-
|
144,138
|
4,400
|
|||||
Bank
of China (Suzhou)
|
As
stated below, see note (b)
|
From
Feb. 12, 2007, to Feb. 12, 2012, RMB80 million, 25% payable in Feb. 2010,
25% in Feb. 2011 and 50% in Feb. 2012, annual interest at 6.48% in 2007
and 7.74% in 2008.
|
355,592
|
384,368
|
11,733
|
|||||
China
Construction Bank (Suzhou)
|
As
stated below, see note (b)
|
From
Aug. 10, 2006, to Aug. 9, 2011, RMB71 million, 5-year term, one-time
repayment upon maturity, annual interest at 6.84% in 2007 and 7.35% in
2008.
|
315,588
|
341,127
|
10,413
|
|||||
China
Construction Bank (Suzhou)
|
As
stated below, see note (b)
|
From
Aug. 28, 2007, to Aug. 23, 2010, US$1.5 million, 3-year term, one-time
repayment upon maturity, annual interest at 5.18% in 2007 and 3.42% in
2008.
|
48,702
|
49,256
|
1,504
|
Bank
or
|
December 31,
|
|||||||||
agent bank
|
Purpose
|
Line of credit and key
terms
|
2007
|
2008
|
||||||
NT$
|
NT$
|
US$
|
||||||||
(in
thousands)
|
||||||||||
China
Construction Bank (Suzhou)
|
As
stated below, see note (b)
|
From
Aug. 10, 2006, to Aug. 9, 2011, US$1 million, 5-year term, one-time
repayment upon maturity, annual interest at 5.90% in 2007 and 3.39% in
2008.
|
32,468
|
32,838
|
1,002
|
|||||
China
Construction Bank (Suzhou)
|
As
stated below, see note (b)
|
From
Jul. 24, 2007, to Jul. 23, 2010, US$1 million, 3-year term, one-time
repayment upon maturity, annual interest at 5.41% in 2007 and 4.12% in
2008.
|
32,468
|
32,837
|
1,002
|
149,912,499 | 127,142,514 | 3,881,029 | ||||||||||
Less:
current portion
|
(30,242,288 | ) | (30,491,872 | ) | (930,765 | ) | ||||||
119,670,211 | 96,650,642 | 2,950,264 | ||||||||||
Unused
available balance
|
79,674,787 | 103,818,007 | 3,169,048 |
Note
(a):
|
Long-term
borrowings assumed from QDI in connection with the merger on October 1,
2006.
|
Note
(b):
|
The
purpose of the loan is to fund the purchase of machinery, equipment and
building.
|
Note
(c):
|
The
purpose of the loan is for operational
use.
|
NT$
|
US$
|
|||||||
(in
thousands)
|
||||||||
2009
|
30,491,872 | 930,765 | ||||||
2010
|
32,018,967 | 977,380 | ||||||
2011
|
31,946,583 | 975,171 | ||||||
2012
|
19,745,575 | 602,734 | ||||||
Thereafter
|
12,939,517 | 394,979 | ||||||
Total
|
127,142,514 | 3,881,029 |
17.
|
Retirement
Plans
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Benefit
obligation:
|
||||||||||||
Vested
benefit obligation
|
(5,405 | ) | - | - | ||||||||
Non-vested
benefit obligation
|
(452,694 | ) | (490,196 | ) | (14,963 | ) | ||||||
Accumulated
benefit obligation
|
(458,099 | ) | (490,196 | ) | (14,963 | ) | ||||||
Additional
benefits based on future salary increase
|
(519,291 | ) | (567,180 | ) | (17,313 | ) | ||||||
Projected
benefit obligation
|
(977,390 | ) | (1,057,376 | ) | (32,276 | ) | ||||||
Fair
value of plan assets
|
932,964 | 1,111,106 | 33,916 | |||||||||
Funded
status
|
(44,426 | ) | 53,730 | 1,640 | ||||||||
Unrecognized
net transition obligation
|
10,592 | 8,506 | 260 | |||||||||
Unrecognized
pension loss
|
200,957 | 223,637 | 6,826 | |||||||||
Minimum
pension liability
|
- | (49,761 | ) | (1,519 | ) | |||||||
Prepaid
pension assets
|
167,123 | 236,112 | 7,207 |
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
|
2008
|
|||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Defined
benefit pension plan:
|
||||||||||||||||
Service
cost
|
8,100 | 8,949 | 8,116 | 248 | ||||||||||||
Interest
cost
|
20,508 | 26,445 | 29,547 | 902 | ||||||||||||
Expected
return on plan assets
|
(15,208 | ) | (21,760 | ) | (28,561 | ) | (872 | ) | ||||||||
Amortization
|
3,092 | 13,184 | 6,907 | 211 | ||||||||||||
Gain
on curtailment
|
- | - | (1,630 | ) | (50 | ) | ||||||||||
Net periodic pension
cost
|
16,492 | 26,818 | 14,379 | 439 |
December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Discount
rate
|
2.75 | % | 3.00 | % | 2.50 | % | ||||||
Rate
of increase in future compensation levels
|
3.50 | % | 3.50 | % | 2.50% – 3.00 | % | ||||||
Expected
long-term rate of return on plan assets
|
2.75 | % | 3.00 | % | 2.50 | % |
18.
|
Stockholders’
Equity
|
(1)
|
at
least 5 percent as employee
bonuses;
|
(2)
|
at
most 1 percent as remuneration to directors;
and
|
(3)
|
the
remaining portion, in whole or in part, as dividends to common
stockholders.
|
Distribution of earnings
|
Dividends per share
|
|||||||||||||||
2006
|
2007
|
2006
|
2007
|
|||||||||||||
NT$
|
NT$
|
|||||||||||||||
(in
thousands, except for per share data)
|
||||||||||||||||
Legal
reserve
|
910,347 | 5,641,777 | - | - | ||||||||||||
Employee
bonuses—cash
|
245,793 | 1,624,832 | - | - | ||||||||||||
Employee
bonuses—stock (at par)
|
573,519 | 2,437,247 | - | - | ||||||||||||
Remuneration
to directors and supervisors
|
30,500 | 138,604 | - | - | ||||||||||||
Cash
dividend
|
1,514,793 | 19,670,577 | 0.2 | 2.5 | ||||||||||||
Stock
dividend
|
1,514,793 | 3,934,115 | 0.2 | 0.5 |
Plan
|
Issuing
date
|
Units
issued
|
Term
of
grant
|
Option
exercising
term
|
||||
2002
ESO Plan
|
Aug.
8, 2002
|
1,861
|
Aug.
8, 2002–Aug.
7, 2008
|
Aug.
8, 2004–Aug.
7, 2008
|
||||
2003
ESO Plan
|
Dec.
31, 2003
|
5,631
|
Dec.
31, 2003–Dec.
30, 2009
|
Dec.
31, 2005–Dec.
30, 2009
|
Unit
|
Weighted-average
exercise price
|
|||||||
(in
thousands)
|
NT$
|
|||||||
Balance
at October 1, 2006
|
7,492 | 48.00 | ||||||
Units
exercised
|
(224 | ) | 38.50 | |||||
Units
cancelled
|
(122 | ) | 48.20 | |||||
Balance
at December 31, 2006
|
7,146 | 48.30 | ||||||
Units
exercised
|
(2,796 | ) | 45.30 | |||||
Units
increased due to issuance of stock dividends
|
142 | 47.90 | ||||||
Units
cancelled
|
(798 | ) | 50.60 | |||||
Balance
at December 31, 2007
|
3,694 | 48.10 | ||||||
Units
exercised
|
(621 | ) | 42.90 | |||||
Units
increased due to issuance of stock dividends
|
250 | 45.20 | ||||||
Units
cancelled
|
(526 | ) | 42.50 | |||||
Balance
at December 31, 2008
|
2,797 | 46.00 |
December 31, 2007
|
||||||||||||||||
Outstanding stock options
|
Vested options
|
|||||||||||||||
Plan
|
Units
|
Remaining
vesting
period
(years)
|
Units
|
Exercise
price
|
||||||||||||
(in
thousands)
|
(in
thousands)
|
NT$
|
||||||||||||||
2002
ESO Plan
|
494 | 0.58 | 494 | 37.50 | ||||||||||||
2003
ESO Plan
|
3,200 | 2.00 | 3,200 | 49.70 | ||||||||||||
3,694 | 3,694 |
December 31, 2008
|
||||||||||||||||
Outstanding stock options
|
Vested options
|
|||||||||||||||
Plan
|
Units
|
Remaining
vesting
period
(years)
|
Units
|
Exercise
price
|
||||||||||||
(in
thousands)
|
(in
thousands)
|
NT$
|
||||||||||||||
2003
ESO Plan
|
2,797
|
1.00
|
2,797
|
46.00
|
2002 ESO Plan
|
2003 ESO Plan
|
|||||||
Dividend
yield
|
2.4% | 2.4% | ||||||
Expected
volatility
|
40.6% | 43.7% | ||||||
Risk-free
interest rate
|
1.7% | 1.7% | ||||||
Expected
continuing period
|
0.9
year
|
1.9
years
|
19.
|
Income
Taxes
|
|
(a)
|
Pursuant
to the Act for Establishment and Administration of Science Parks and the
Statute for Upgrading Industries, AUO (including the extinguished Unipac
and QDI), and Toppan CFI are entitled to elect appropriate tax incentives,
such as tax exemption and investment tax credits for shareholders, based
on initial investments and subsequent capital increases for the purpose of
purchasing qualified TFT-LCD and color filter production equipment and
machinery.
|
Year
of
investment
|
Tax incentive chosen
|
Tax exemption period
|
||
AUO:
|
||||
1996
|
Exemption
from corporate income taxes for five years
|
Jan.
1, 2003 – Dec. 31, 2007
|
||
1999
|
Exemption
from corporate income taxes for four years
|
Jan.
1, 2005 – Dec. 31, 2008
|
||
1999,
2000, 2001
|
Exemption
from corporate income taxes for five years
|
Jan.
1, 2005 – Dec. 31, 2009
|
||
2001,
2002, 2003
|
Exemption
from corporate income taxes for five years
|
Jan.
1, 2006 – Dec. 31, 2010
|
||
2002
|
Exemption
from corporate income taxes for five years
|
Jan.
1, 2007 – Dec. 31, 2011
|
||
2003
|
Exemption
from corporate income taxes for five years
|
Jan.
1, 2008 – Dec. 31, 2012
|
||
2004
|
Exemption
from corporate income taxes for five years
|
Jun.
25, 2007 – Jun. 24, 2012
|
||
2004
|
Exemption
from corporate income taxes for five years
|
Sep.
29, 2007 – Sep. 28, 2012
|
||
2004
|
Exemption
from corporate income taxes for five years
|
Nov.
3, 2007 – Nov. 2, 2012
|
||
2005,
2006, 2007
|
Exemption
from corporate income taxes for five years
|
Pending
designation
|
||
Toppan
CFI:
|
||||
2001
|
Exemption
from corporate income taxes for five years
|
Jan.
1, 2004 – Dec. 31, 2008
|
||
2002
|
Exemption
from corporate income taxes for five years
|
Jul.
31, 2004 – Jul. 30, 2009
|
||
2004
|
Exemption
from corporate income taxes for five years
|
Jun.
30, 2005 – Jun. 29, 2010
|
|
(b)
|
The
components of income tax expense (benefit) are summarized as
follows:
|
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in thousands) | ||||||||||||||||
Current
income tax expense
|
1,227,910 | 4,475,124 | 2,205,215 | 67,314 | ||||||||||||
Deferred
income tax expense (benefit)
|
(159,586 | ) | (2,387,214 | ) | 2,423,851 | 73,988 | ||||||||||
1,068,324 | 2,087,910 | 4,629,066 | 141,302 |
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Expected
income tax expense
|
2,550,076 | 14,640,961 | 6,567,728 | 200,480 | ||||||||||||
Tax
exemption
|
(917,564 | ) | (6,085,443 | ) | (2,975,267 | ) | (90,820 | ) | ||||||||
Increase
in investment tax credits, net of expired portion
|
(4,327,895 | ) | (1,654,487 | ) | (5,162,128 | ) | (157,574 | ) | ||||||||
Tax
on undistributed retained earnings
|
927,908 | 431,373 | 2,297,061 | 70,118 | ||||||||||||
Increase
(decrease) in valuation allowance
|
2,710,172 | (5,082,677 | ) | 3,374,806 | 103,016 | |||||||||||
Impairment
loss on domestic marketable securities
|
65,708 | - | 412,087 | 12,578 | ||||||||||||
Non-deductible
expenses and others
|
59,919 | (161,817 | ) | 114,779 | 3,504 | |||||||||||
Income
tax expense
|
1,068,324 | 2,087,910 | 4,629,066 | 141,302 |
|
(c)
|
The
components of deferred income tax assets (liabilities) are summarized as
follows:
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Current:
|
||||||||||||
Investment
tax credits
|
4,451,127 | 9,527,886 | 290,839 | |||||||||
Net
operating loss carryforwards
|
700 | - | - | |||||||||
Timing
differences of revenue recognition between accounting and taxable
income
|
1,263,941 | 538,820 | 16,448 | |||||||||
Inventories
devaluation
|
750,598 | 2,078,665 | 63,451 | |||||||||
Product
warranty
|
419,957 | 471,338 | 14,388 | |||||||||
Unrealized
losses and expenses
|
557,021 | 1,154,627 | 35,245 | |||||||||
Others
|
10,206 | 282,110 | 8,611 | |||||||||
7,453,550 | 14,053,446 | 428,982 | ||||||||||
Valuation
allowance
|
(479,751 | ) | (8,673,006 | ) | (264,744 | ) | ||||||
Net
deferred tax assets—current
|
6,973,799 | 5,380,440 | 164,238 | |||||||||
Noncurrent:
|
||||||||||||
Investment
tax credits
|
17,502,547 | 13,015,255 | 397,291 | |||||||||
Net
operating loss carryforwards
|
709,315 | 256,900 | 7,841 | |||||||||
Investment
gain under the equity method
|
(492,664 | ) | (1,035,489 | ) | (31,608 | ) | ||||||
Goodwill
|
(444,646 | ) | (765,906 | ) | (23,379 | ) | ||||||
Others
|
(304,734 | ) | (339,953 | ) | (10,377 | ) | ||||||
16,969,818 | 11,130,807 | 339,768 | ||||||||||
Valuation
allowance
|
(16,684,240 | ) | (9,125,425 | ) | (278,554 | ) | ||||||
Net
deferred tax assets—noncurrent
|
285,578 | 2,005,382 | 61,214 | |||||||||
Total
gross deferred tax assets
|
25,869,579 | 28,098,244 | 857,700 | |||||||||
Total
gross deferred tax liabilities
|
(1,446,211 | ) | (2,913,991 | ) | (88,950 | ) | ||||||
Total
valuation allowance
|
(17,163,991 | ) | (17,798,431 | ) | (543,298 | ) | ||||||
7,259,377 | 7,385,822 | 225,452 |
|
(d)
|
Investment
tax credits
|
Year of assessment
|
Unused tax credits
|
Expiration year
|
|||||||
NT$
|
US$
|
||||||||
(in
thousands)
|
|||||||||
|
|||||||||
2005
|
9,527,886 | 290,839 |
2009
|
||||||
2006
|
5,583,571 | 170,439 |
2010
|
||||||
2007
|
2,350,559 | 71,751 |
2011
|
||||||
2008
(estimated)
|
5,081,125 | 155,101 |
2012
|
||||||
22,543,141 | 688,130 |
|
(e)
|
Net
operating loss carryforwards
|
Expiration year
|
|||||||||||
Year of assessment
|
Unused NOL
|
Current
|
As amended
|
||||||||
NT$
|
US$
|
||||||||||
(in
thousands)
|
|||||||||||
2006
|
783,130 | 23,905 |
2011
|
2016
|
|||||||
2007
|
193,740 | 5,914 |
2012
|
2017
|
|||||||
2008
(estimated)
|
50,730 | 1,549 |
2013
|
2018
|
|||||||
1,027,600 | 31,368 |
|
(f)
|
Assessments
by the tax authorities
|
|
(g)
|
The
Enterprise Income Tax Law of the People’s Republic of China (the “EITL”),
as approved by related government authorities on March 16, 2007, is
effective from January 1, 2008. Prior to 2008 and the
promulgation of the EITL, income tax rates applicable to the Company’s
subsidiary companies located in Mainland China ranged from 0% to
33%. Beginning on January 1, 2008, income tax rates changed to
a range of 0% to 25%. The Company remeasured deferred tax
assets and liabilities as of December 31, 2007, in accordance with the
EITL, and concluded that the adoption of the EITL did not have a material
impact on the Company’s consolidated financial
statements.
|
|
(h)
|
The
integrated income tax system
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Unappropriated
earnings:
|
||||||||||||
Earned
after January 1, 1998
|
89,092,396 | 76,912,630 | 2,347,760 | |||||||||
ICA
balance
|
1,768,147 | 4,487,600 | 136,984 |
For the year ended December
31,
|
||||||||
2007
|
2008
|
|||||||
(actual)
|
(estimated)
|
|||||||
Creditable
ratio for earnings distribution to Republic of China resident
stockholders
|
7.74% | 7.78% |
20.
|
Earnings
per Share (“EPS”)
|
For the year ended December
31,
|
||||||||||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||||||||||
Pre-tax
|
After tax
|
Pre-tax
|
After tax
|
Pre-tax
|
After tax
|
|||||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
|||||||||||||||||||
(in
thousands, except for per share data)
|
||||||||||||||||||||||||
Net
income attributable to equity holders of the parent
company:
|
||||||||||||||||||||||||
Net
income before cumulative effect of changes in accounting
principles
|
10,119,034 | 9,142,458 | 58,443,002 | 56,417,766 | 25,903,996 | 21,267,386 | ||||||||||||||||||
Cumulative
effect of changes in accounting principles
|
(38,986 | ) | (38,986 | ) | - | - | - | - | ||||||||||||||||
10,080,048 | 9,103,472 | 58,443,002 | 56,417,766 | 25,903,996 | 21,267,386 | |||||||||||||||||||
Weighted-average
number of shares outstanding during the year:
|
||||||||||||||||||||||||
Shares
of common stock at beginning of year
|
5,830,547 | 5,830,547 | 7,573,403 | 7,573,403 | 7,865,201 | 7,865,201 | ||||||||||||||||||
Common
stock issued in connection with the merger with QDI
|
372,817 | 372,817 | - | - | - | - | ||||||||||||||||||
Employee
stock options
|
41 | 41 | 1,138 | 1,138 | 419 | 419 | ||||||||||||||||||
Convertible
bonds
|
- | - | 26,126 | 26,126 | 2,398 | 2,398 | ||||||||||||||||||
Issuance
of shareholders’ stock dividends and employee stock bonus
|
263,522 | 263,522 | 208,831 | 208,831 | 637,136 | 637,136 | ||||||||||||||||||
6,466,927 | 6,466,927 | 7,809,498 | 7,809,498 | 8,505,154 | 8,505,154 | |||||||||||||||||||
Basic
EPS (NT$):
|
||||||||||||||||||||||||
Basic
EPS—net income before cumulative effect of changes in accounting
principles
|
1.57 | 1.42 | 7.48 | 7.22 | 3.05 | 2.50 | ||||||||||||||||||
Basic
EPS—cumulative effect of changes in accounting principles
|
(0.01 | ) | (0.01 | ) | - | - | - | - | ||||||||||||||||
1.56 | 1.41 | 7.48 | 7.22 | 3.05 | 2.50 | |||||||||||||||||||
Weighted-average
number of shares outstanding during the year—retroactively
adjusted
|
7,182,446 | 7,182,446 | 8,441,866 | 8,441,866 | ||||||||||||||||||||
Basic
EPS—retroactively adjusted (NT$):
|
||||||||||||||||||||||||
Basic
EPS—net income before cumulative effect of changes in accounting
principles—retroactively adjusted
|
1.41 | 1.28 | 6.92 | 6.68 | ||||||||||||||||||||
Basic
EPS—cumulative effect of changes in accounting principles—retroactively
adjusted
|
(0.01 | ) | (0.01 | ) | - | - | ||||||||||||||||||
1.40 | 1.27 | 6.92 | 6.68 |
For the year ended December
31,
|
||||||||||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||||||||||
Pre-tax
|
After tax
|
Pre-tax
|
After tax
|
Pre-tax
|
After tax
|
|||||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
|||||||||||||||||||
(in
thousands, except for per share data)
|
||||||||||||||||||||||||
Basic
EPS—retroactively
adjusted (NT$):
|
||||||||||||||||||||||||
Basic
EPS—net
income before cumulative effect of changes in accounting principles—retroactively
adjusted
|
1.41 | 1.28 | 6.92 | 6.68 | ||||||||||||||||||||
Effects
of potential common stock:
|
||||||||||||||||||||||||
Convertible
bonds payable
|
(0.01 | ) | (0.01 | ) | - | - | ||||||||||||||||||
1.40 | 1.27 | 6.92 | 6.68 |
For the year ended December
31,
|
||||||||||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||||||||||
Pre-tax
|
After tax
|
Pre-tax
|
After tax
|
Pre-tax
|
After tax
|
|||||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
|||||||||||||||||||
(in
thousands, except for per share data)
|
||||||||||||||||||||||||
Net
income attributable to equity holders of the parent company (including the
effect of dilutive potential common stock)
|
||||||||||||||||||||||||
Net
income attributable to equity holders of the parent
company
|
10,080,048 | 9,103,472 | 58,443,002 | 56,417,766 | 25,903,996 | 21,267,386 | ||||||||||||||||||
Effects
of potential common stock:
|
||||||||||||||||||||||||
Convertible
bonds payable
|
(706,883 | ) | (530,162 | ) | (300,056 | ) | (225,042 | ) | 53,055 | 39,792 | ||||||||||||||
9,373,165 | 8,573,310 | 58,142,946 | 56,192,724 | 25,957,051 | 21,307,178 |
For the year ended December
31,
|
||||||||||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||||||||||
Pre-tax
|
After tax
|
Pre-tax
|
After tax
|
Pre-tax
|
After tax
|
|||||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
|||||||||||||||||||
(in
thousands, except for per share data)
|
||||||||||||||||||||||||
Weighted-average
number of shares outstanding during the year (including the effect of
dilutive potential common stock):
|
||||||||||||||||||||||||
Weighted-average
number of shares outstanding during the year
|
6,466,927 | 6,466,927 | 7,809,498 | 7,809,498 | 8,505,154 | 8,505,154 | ||||||||||||||||||
Effects
of potential common stock:
|
||||||||||||||||||||||||
Convertible
bonds payable
|
99,045 | 99,045 | 377,304 | 377,304 | 204,708 | 204,708 | ||||||||||||||||||
Employee
bonuses
|
- | - | - | - | 135,795 | 135,795 | ||||||||||||||||||
Employee
stock options
|
56 | 56 | 547 | 547 | 104 | 104 | ||||||||||||||||||
6,566,028 | 6,566,028 | 8,187,349 | 8,187,349 | 8,845,761 | 8,845,761 | |||||||||||||||||||
Diluted
EPS (NT$)
|
1.43 | 1.31 | 7.10 | 6.86 | 2.93 | 2.41 | ||||||||||||||||||
Weighted-average
number of shares outstanding—retroactively adjusted (including the effect
of dilutive potential common stock)
|
7,292,512 | 7,292,512 | 8,850,313 | 8,850,313 | ||||||||||||||||||||
Diluted
EPS—retroactively adjusted (NT$):
|
||||||||||||||||||||||||
Diluted
EPS—net income before cumulative effect of changes in accounting
principles—retroactively adjusted
|
1.30 | 1.19 | 6.57 | 6.35 | ||||||||||||||||||||
Diluted
EPS—cumulative effect of changes in accounting principles—retroactively
adjusted
|
(0.01 | ) | (0.01 | ) | - | - | ||||||||||||||||||
1.29 | 1.18 | 6.57 | 6.35 |
21.
|
Additional
Disclosure on Financial Instruments
|
(a)
|
Fair
value information
|
December 31, 2007
|
||||||||
Carrying amount
|
Fair value
|
|||||||
NT$
|
NT$
|
|||||||
(in
thousands)
|
||||||||
Financial
assets:
|
||||||||
Cash
and cash equivalents
|
89,889,607 | 89,889,607 | ||||||
Accounts
receivable (including related parties)
|
75,910,916 | 75,910,916 | ||||||
Available-for-sale
financial assets—current
|
1,347,131 | 1,347,131 | ||||||
Financial
assets carried at cost—noncurrent
|
741,045 |
See
(b) (3)
|
||||||
Foreign
currency forward contracts
|
168,868 | 168,868 | ||||||
Interest
rate swap contracts
|
299,224 | 299,224 | ||||||
Other
current financial assets
|
2,350,885 | 2,350,885 | ||||||
Available-for-sale
financial assets—noncurrent
|
2,123,631 | 2,123,631 | ||||||
Refundable
deposits
|
81,764 | 81,764 | ||||||
Restricted
cash in bank
|
33,500 | 33,500 | ||||||
Financial
liabilities:
|
||||||||
Short-term
borrowings
|
136,594 | 136,594 | ||||||
Accounts
payable (including related parties)
|
96,577,469 | 96,577,469 | ||||||
Equipment
and construction-in-progress payables
|
15,952,167 | 15,952,167 | ||||||
Long-term
borrowings (including current portion)
|
149,912,499 | 149,917,471 | ||||||
Convertible
bonds payable (including current portion)
|
11,688,245 | 14,327,740 | ||||||
Bonds
payable (including current portion)
|
16,000,000 | 16,005,852 | ||||||
Foreign
currency forward contracts
|
318,875 | 318,875 | ||||||
Interest
rate swap contracts
|
81,667 | 81,667 |
December 31, 2008
|
||||||||||||||||
Carrying amount
|
Fair value
|
|||||||||||||||
NT$
|
US$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Financial
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
83,434,697 | 2,546,847 | 83,434,697 | 2,546,847 | ||||||||||||
Accounts
receivable (including related parties)
|
23,899,077 | 729,520 | 23,899,077 | 729,520 | ||||||||||||
Available-for-sale
financial assets—current
|
470,301 | 14,356 | 470,301 | 14,356 | ||||||||||||
Financial
assets carried at cost—noncurrent
|
583,197 | 17,802 |
See
(b) (3)
|
- | ||||||||||||
Foreign
currency forward contracts
|
1,067,531 | 32,586 | 1,067,531 | 32,586 | ||||||||||||
Interest
rate swap contracts
|
5,398 | 165 | 5,398 | 165 | ||||||||||||
Other
current financial assets
|
3,082,294 | 94,087 | 3,082,294 | 94,087 | ||||||||||||
Available-for-sale
financial assets—noncurrent
|
595,750 | 18,185 | 595,750 | 18,185 | ||||||||||||
Refundable
deposits
|
215,869 | 6,590 | 215,869 | 6,590 | ||||||||||||
Restricted
cash in bank
|
25,501 | 779 | 25,501 | 779 | ||||||||||||
Financial
liabilities:
|
||||||||||||||||
Short-term
borrowings
|
4,857,260 | 148,268 | 4,857,260 | 148,268 | ||||||||||||
Accounts
payable (including related parties)
|
58,178,225 | 1,775,892 | 58,178,225 | 1,775,892 | ||||||||||||
Equipment
and construction-in-progress payables
|
21,363,213 | 652,113 | 21,363,213 | 652,113 | ||||||||||||
Long-term
borrowings (including current portion)
|
127,142,514 | 3,881,029 | 127,152,178 | 3,881,324 | ||||||||||||
Convertible
bonds payable (including current portion)
|
10,284,282 | 313,928 | 9,971,668 | 304,385 | ||||||||||||
Bonds
payable (including current portion)
|
20,500,000 | 625,763 | 20,808,217 | 635,171 | ||||||||||||
Foreign
currency forward contracts
|
28,831 | 880 | 28,831 | 880 | ||||||||||||
Interest
rate swap contracts
|
829,389 | 25,317 | 829,389 | 25,317 |
(b)
|
The
following methods and assumptions are used to estimate the fair value of
the Company’s financial assets and
liabilities:
|
(1)
|
The
carrying
amount of cash and cash equivalents, accounts receivable/payable
(including related parties), other current financial assets, equipment and
construction-in-progress payables, and short-term borrowings approximates
their fair value due to the short-term nature of these
items.
|
(2)
|
The
fair
value of financial instruments other than financial assets carried at cost
is based on quoted market prices, if available, in active
markets. If market price is unavailable, fair value is
determined using a valuation technique, with estimates and assumptions
consistent with those made by market
participants.
|
(3)
|
It
is not practicable to estimate the fair value of financial assets carried
at cost, as these financial instruments are not traded in an active public
market.
|
(4)
|
The
fair value of floating-rate long-term borrowings is calculated based on
the prevailing market rate adjusted by the Company’s credit
spread. Management believes the carrying value of floating-rate
long-term borrowings approximates the fair
value.
|
(5)
|
The
fair value of fixed-rate long-term borrowings is estimated based on the
present value of future discounted cash flows based on prevailing market
interest rates for similar debt instruments of comparable maturities and
credit standing of the
borrower.
|
(c)
|
The
fair values of the Company’s financial assets and liabilities determined
by publicly quoted market price, if available, or determined using a
valuation technique were as
follows:
|
December 31, 2007
|
||||||||
Publicly
quoted
market prices
|
Fair
value based on
valuation technique
|
|||||||
NT$
|
NT$
|
|||||||
(in
thousands)
|
||||||||
Financial
assets:
|
||||||||
Cash
and cash equivalents
|
89,889,607 | - | ||||||
Accounts
receivable (including related parties)
|
- | 75,910,916 | ||||||
Available-for-sale
financial assets—current
|
1,347,131 | - | ||||||
Foreign
currency forward contracts
|
- | 168,868 | ||||||
Interest
rate swap contracts
|
- | 299,224 | ||||||
Other
current financial assets
|
- | 2,350,885 | ||||||
Available-for-sale
financial assets—noncurrent
|
2,123,631 | - | ||||||
Refundable
deposits
|
- | 81,764 | ||||||
Restricted
cash in bank
|
33,500 | - | ||||||
Financial
liabilities:
|
||||||||
Short-term
borrowings
|
- | 136,594 | ||||||
Accounts
payable (including related parties)
|
- | 96,577,469 | ||||||
Equipment
and construction-in-progress payables
|
- | 15,952,167 | ||||||
Long-term
borrowings (including current portion)
|
- | 149,917,471 | ||||||
Convertible
bonds payable (including current portion)
|
- | 14,327,740 | ||||||
Bonds
payable (including current portion)
|
- | 16,005,852 | ||||||
Foreign
currency forward contracts
|
- | 318,875 | ||||||
Interest
rate swap contracts
|
- | 81,667 |
December 31, 2008
|
||||||||||||||||
Publicly
quoted
market prices
|
Fair
value based on
valuation technique
|
|||||||||||||||
NT$
|
US$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Financial
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
83,434,697 | 2,546,847 | - | - | ||||||||||||
Accounts
receivable (including related parties)
|
- | - | 23,899,077 | 729,520 | ||||||||||||
Available-for-sale
financial assets—current
|
470,301 | 14,356 | - | - | ||||||||||||
Foreign
currency forward contracts
|
- | - | 1,067,531 | 32,586 | ||||||||||||
Interest
rate swap contracts
|
- | - | 5,398 | 165 | ||||||||||||
Other
current financial assets
|
- | - | 3,082,294 | 94,087 | ||||||||||||
Available-for-sale
financial assets—noncurrent
|
595,750 | 18,185 | - | - | ||||||||||||
Refundable
deposits
|
- | - | 215,869 | 6,590 | ||||||||||||
Restricted
cash in bank
|
25,501 | 779 | - | - | ||||||||||||
Financial
liabilities:
|
||||||||||||||||
Short-term
borrowings
|
- | - | 4,857,260 | 148,268 | ||||||||||||
Accounts
payable (including related parties)
|
- | - | 58,178,225 | 1,775,892 | ||||||||||||
Equipment
and construction-in-progress payables
|
- | - | 21,363,213 | 652,113 | ||||||||||||
Long-term
borrowings (including current portion)
|
- | - | 127,152,178 | 3,881,324 | ||||||||||||
Convertible
bonds payable (including current portion)
|
- | - | 9,971,668 | 304,385 | ||||||||||||
Bonds
payable (including current portion)
|
- | - | 20,808,217 | 635,171 | ||||||||||||
Foreign
currency forward contracts
|
- | - | 28,831 | 880 | ||||||||||||
Interest
rate swap contracts
|
- | - | 829,389 | 25,317 |
(d)
|
The
Company pledged certain of its financial assets to secure long-term
borrowings as of December 31, 2007 and 2008; see note
23.
|
(e)
|
Gains
(losses) on valuation of financial instruments resulting from the change
in fair value, determined using valuation techniques, were NT$(608,572)
thousand, NT$381,052 thousand and NT$1,075,326 (US$32,824) thousand for
the years ended December 31, 2006, 2007 and 2008,
respectively.
|
(f)
|
Financial
liabilities exposed to cash flow risk resulting from change in interest
rates were NT$89,437,982 thousand and NT$85,688,663 (US$2,615,649)
thousand as of December 31, 2007 and 2008,
respectively.
|
(g)
|
Financial
risks relating to financial
instruments
|
(1)
|
Market
risk
|
(2)
|
Credit
risk
|
(3)
|
Liquidity
risk
|
(4)
|
Cash
flow risk resulting from change in interest
rates
|
22.
|
Related-party
Transactions
|
Name of related
party
|
Relationship with the
Company
|
|
Cando
|
Investee
of AUO and Konly
|
|
Raydium
|
Investee
of Konly
|
|
Wellypower
|
Investee
of Konly
|
|
Entire
|
Investee
of Konly
|
|
Orise
|
Investee
of Konly prior to December 2007; see note (i) below
|
|
Sita
|
Investee
of Konly
|
|
Daxin
|
Investee
of Konly
|
|
Qisda
|
Shareholder
represented on AUO’s board of directors; investee of AUO and
Konly
|
|
BenQ
Corporation (“BenQ”) (formerly BenQ Asia Pacific Corp.)
|
Subsidiary
of Qisda
|
|
Qisda
Czech s.r.o. (“QZBR”) (formerly BenQ Technologies Czech
s.r.o)
|
Subsidiary
of Qisda
|
|
Daxon
Technology Inc. (“Daxon”)
|
Subsidiary
of Qisda
|
|
Qisda
Co., Ltd. Suzhou (“QCSZ”) (formerly BenQ (IT) Co., Ltd.
Suzhou)
|
Subsidiary
of Qisda
|
|
Qisda
Optronics (Suzhou) Co., Ltd. (“QCOS”) (formerly BenQ Optronics (Suzhou)
Co., Ltd.)
|
Subsidiary
of Qisda
|
|
Darfon
Electronics Corp. (“Darfon”)
|
Subsidiary
of Qisda
|
|
Nano-Op
|
Investee
of Konly and Ronly
|
|
Nano
Electro-Op (Kunshan) Co., Ltd. (“Nano-Kunshan“)
|
Subsidiary
of Nano-Op
|
|
New
Nano Electro-Op (Kunshan) Co., Ltd. (“New Nano-Kunshan“)
|
Subsidiary
of Nano-Op
|
|
Forhouse
|
Investee
of DPT; see note (ii) below
|
|
Fortech
International Corp. (“Fortech”)
|
Subsidiary
of Forhouse; see note (ii) below
|
|
Fortress
Optronics International Corporation (“Fortress”)
|
Subsidiary
of Forhouse; see note (ii) below
|
Name of related
party
|
Relationship with the
Company
|
|
Fortech
Electronics (Suzhou) Co., Ltd. (“FHSS”)
|
Subsidiary
of Forhouse; see note (ii) below
|
|
Fortech
Optronics (Xiamen) Co., Ltd. (“FHSSXM”)
|
Subsidiary
of Forhouse; see note (ii) below
|
|
Fortress
Optronics (Shanghai) Co., Ltd. (“FHUU”)
|
Subsidiary
of Forhouse; see note (ii) below
|
|
Directors,
supervisors, president and vice-presidents
|
The
Company’s executive officers
|
|
Note
(i):
|
Towards
the end of 2007, Konly lost its ability to exercise significant influence
over the operating and financial policies of
Orise. Transactions with Orise through December 2007 were
disclosed as related-party
transactions.
|
|
Note
(ii):
|
The
Company invested in Forhouse through DPT during the year 2008 and
accounted for its investment in Forhouse under the equity method of
accounting. Forhouse is considered a related party of the
Company, and related-party transactions were disclosed starting from
September 3, 2008.
|
(1)
|
Sales
|
For the year ended
December 31,
|
||||||||||||||||
|
2006
|
2007
|
2008
|
|||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in thousands) | ||||||||||||||||
QCSZ
|
21,647,010 | 23,732,707 | 14,250,810 | 435,006 | ||||||||||||
QZBR
|
209,841 | 858,118 | 2,427,621 | 74,103 | ||||||||||||
QCOS
|
1,227,909 | 814,471 | 1,350,840 | 41,234 | ||||||||||||
Qisda
|
1,997,401 | 2,441,050 | 638,016 | 19,476 | ||||||||||||
Acer
|
3,909,532 | - | - | - | ||||||||||||
Others
|
1,809,534 | 1,786,566 | 855,427 | 26,112 | ||||||||||||
Less:
allowance for sales returns and discounts
|
(131,735 | ) | - | - | - | |||||||||||
30,669,492 | 29,632,912 | 19,522,714 | 595,931 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
QCSZ
|
4,275,805 | 505,725 | 15,437 | |||||||||
QZBR
|
113,108 | 352,534 | 10,761 | |||||||||
QCOS
|
151,601 | 341,779 | 10,433 | |||||||||
BenQ
|
133,134 | 196,908 | 6,011 | |||||||||
Qisda
|
437,501 | 186,254 | 5,685 | |||||||||
FHSSXM
|
- | 118,284 | 3,611 | |||||||||
Others
|
18,645 | 47,890 | 1,462 | |||||||||
Less:
allowance for doubtful accounts
|
(34,243 | ) | (1,725 | ) | (53 | ) | ||||||
Less:
allowance for sales returns and discounts
|
(298,710 | ) | (108,848 | ) | (3,323 | ) | ||||||
4,796,841 | 1,638,801 | 50,024 |
(2)
|
Disposal
of property, plant and equipment, operating leases, and
others
|
(3)
|
Purchases
|
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Daxon
|
3,730,519 | 8,775,448 | 8,903,819 | 271,789 | ||||||||||||
Raydium
|
157,084 | 4,137,943 | 6,331,750 | 193,277 | ||||||||||||
Cando
|
3,365,891 | 4,042,390 | 3,414,922 | 104,241 | ||||||||||||
Nano-Kunshan
|
- | - | 3,286,114 | 100,309 | ||||||||||||
Toppan
CFI
|
2,241,338 | - | - | - | ||||||||||||
Orise
|
134,647 | 1,644,595 | - | - | ||||||||||||
Others
|
403,010 | 2,651,804 | 10,001,922 | 305,309 | ||||||||||||
10,032,489 | 21,252,180 | 31,938,527 | 974,925 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Raydium
|
1,214,517 | 1,624,681 | 49,593 | |||||||||
Daxon
|
2,975,279 | 1,583,567 | 48,338 | |||||||||
Forhouse
|
- | 1,522,802 | 46,484 | |||||||||
Fortech
|
- | 1,509,808 | 46,087 | |||||||||
Nano-Kunshan
|
- | 1,069,640 | 32,651 | |||||||||
Fortress
|
- | 1,063,740 | 32,471 | |||||||||
Cando
|
1,295,361 | 584,959 | 17,856 | |||||||||
Darfon
|
406,125 | 421,973 | 12,881 | |||||||||
Daxin
|
423,128 | 324,869 | 9,917 | |||||||||
Orise
|
861,897 | - | - | |||||||||
Others
|
395,201 | 2,480,502 | 75,717 | |||||||||
7,571,508 | 12,186,541 | 371,995 |
|
(4)
|
Acquisition
of property, plant and equipment, operating leases, and
others
|
|
(5)
|
Compensation
to executive officers
|
For the year ended December
31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Salaries
|
212,972 | 149,267 | 4,556 | |||||||||
Compensation
|
58,866 | 28,127 | 859 | |||||||||
Service
charges
|
690 | 765 | 23 | |||||||||
Employee
bonuses
|
1,172,120 | 143,690 | 4,386 |
23.
|
Pledged
Assets
|
December 31,
|
||||||||||||||
Pledged assets
|
Pledged to secure
|
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||||
(in
thousands)
|
||||||||||||||
Restricted
cash in banks
|
Oil
purchases, customs duties, and guarantees for foreign
workers
|
33,500 | 25,501 | 779 | ||||||||||
Building
|
Long-term
borrowings
|
25,665,722 | 33,779,934 | 1,031,133 | ||||||||||
Machinery
and equipment
|
Long-term
borrowings and bonds payable
|
164,963,405 | 150,759,321 | 4,601,933 | ||||||||||
190,662,627 | 184,564,756 | 5,633,845 |
24.
|
Commitments
and Contingencies
|
December 31,
|
||||||||
Currency
|
2007
|
2008
|
||||||
(in
thousands)
|
||||||||
USD
|
30,228 | 5,336 | ||||||
JPY
|
9,506,687 | 7,540,907 | ||||||
EUR
|
43 | 2,527 | ||||||
RMB
|
17,644 | 0 |
(d)
|
Operating
lease agreements
|
Year
|
Minimum lease payments
|
||||||||
NT$
|
US$
|
||||||||
(in
thousands)
|
|||||||||
2009
|
362,892 | 11,077 | |||||||
2010
|
331,007 | 10,104 | |||||||
2011
|
324,002 | 9,890 | |||||||
2012
|
324,002 | 9,890 | |||||||
2013
|
276,261 | 8,433 | |||||||
Thereafter
|
2,295,214 | 70,061 |
(e)
|
Litigation
|
|
(1)
|
Alleged
patent infringements
|
|
(2)
|
Investigation
for alleged violation of antitrust and competition
laws
|
|
(3)
|
Antitrust
civil actions lawsuits in the United States and
Canada
|
25.
|
Segment
Information
|
(a)
|
Industrial
information
|
(b)
|
Geographic
information
|
For the year ended December
31,
|
|||||||||||||||||
2006
|
2007
|
2008
|
|||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
||||||||||||||
(in
thousands)
|
|||||||||||||||||
Taiwan
|
89,840,936 | 174,272,661 | 184,895,032 | 5,643,926 | |||||||||||||
The
People’s Republic of China
|
80,559,955 | 115,309,356 | 82,626,965 | 2,522,191 | |||||||||||||
Other
(individually less than 10% of total net sales)
|
122,705,879 | 190,601,609 | 156,406,196 | 4,774,304 | |||||||||||||
293,106,770 | 480,183,626 | 423,928,193 | 12,940,421 |
December 31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Taiwan
|
377,307,330 | 352,858,986 | 371,526,051 | 11,340,844 | ||||||||||||
The
People’s Republic of China
|
26,155,953 | 31,799,442 | 35,798,587 | 1,092,753 | ||||||||||||
Other
|
6,902 | 6,625 | 184,090 | 5,619 | ||||||||||||
403,470,185 | 384,665,053 | 407,508,728 | 12,439,216 |
(c)
|
Major
customer information
|
For the year ended December
31,
|
||||||||||||||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||||||
Samsung
|
32,824,794 | 11 | 61,141,835 | 13 | 62,865,559 | 1,918,973 |
15
|
26.
|
Summary
of Significant Differences between Accounting Principles Generally
Accepted in the Republic of China and Accounting Principles Generally
Accepted in the United States of
America
|
(a)
|
Business
combinations
|
|
(1)
|
Merger
with Unipac
|
|
(2)
|
Merger
with QDI
|
(b)
|
Compensation
|
|
(1)
|
Remuneration
to directors and supervisors
|
|
(2)
|
Employee
bonuses
|
|
(3)
|
Transfer
of treasury stock to employees
|
(c)
|
Equity-method
investments and other-than-temporary
impairment
|
(d)
|
Convertible
bonds
|
(e)
|
Shareholders’
stock dividends
|
(f)
|
Defined
pension benefits
|
(g)
|
Depreciation
of buildings
|
|
(h)
|
Hedging
derivative financial instruments
|
|
(i)
|
Compensated
absences
|
|
(j)
|
Research
and development expense
|
|
(k)
|
Operating
leases
|
|
(l)
|
Income
taxes
|
|
(m)
|
Earnings
per common share
|
|
(n)
|
Principles
of consolidation
|
|
(o)
|
Goodwill
|
|
(p)
|
Recent
accounting pronouncements
|
|
(q)
|
US
GAAP reconciliations
|
|
(1)
Reconciliation of consolidated net
income
|
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands, except for per share data)
|
||||||||||||||||
Net
income attributable to stockholders of the parent company, ROC
GAAP
|
9,103,472 | 56,417,766 | 21,267,386 | 649,188 | ||||||||||||
US
GAAP adjustments:
|
||||||||||||||||
a)
Purchase method of accounting for acquisition of Unipac
|
||||||||||||||||
-Amortization
of intangible assets
|
(1,049,496 | ) | (1,049,496 | ) | (1,049,496 | ) | (32,036 | ) | ||||||||
-Depreciation
|
(70,961 | ) | (16,868 | ) | (22,266 | ) | (680 | ) | ||||||||
-Disposals
of available-for-sale securities
|
- | - | 14,030 | 428 | ||||||||||||
-Impairment
of available-for-sale securities
|
- | - | (182,466 | ) | (5,570 | ) | ||||||||||
b)
Compensation
|
||||||||||||||||
-Remuneration
to directors and supervisors
|
(24,000 | ) | (158,500 | ) | 13,397 | 409 | ||||||||||
-Employee
bonuses
|
||||||||||||||||
-Current-year
provision
|
(737,381 | ) | (4,573,000 | ) | - | - | ||||||||||
-Adjustment
to fair value
|
(3,265,096 | ) | (2,584,194 | ) | (6,520,538 | ) | (199,040 | ) | ||||||||
-Compensation
cost arising from ESPP
|
(147,658 | ) | - | - | - | |||||||||||
c)
Long-term equity investments
|
||||||||||||||||
-Investment
losses
|
(334,340 | ) | (72,354 | ) | (192,840 | ) | (5,886 | ) | ||||||||
-Impairment
loss
|
- | - | (1,928,709 | ) | (58,874 | ) | ||||||||||
d)
Convertible bonds
|
(1,223,176 | ) | (132,599 | ) | 1,252,181 | 38,223 | ||||||||||
f)
Pension expense
|
1,108 | 2,550 | 2,307 | 70 | ||||||||||||
g)
Depreciation of buildings
|
(1,147,039 | ) | (1,675,418 | ) | (1,728,045 | ) | (52,748 | ) | ||||||||
h)
Hedging derivative financial instruments
|
144,730 | 167,019 | 32,625 | 996 | ||||||||||||
i)
Compensated absences expense
|
(88,171 | ) | (11,014 | ) | 80,470 | 2,456 | ||||||||||
k)
Escalation adjustment of rent expense
|
2,130 | 6,802 | 2,129 | 65 | ||||||||||||
l)
Tax effect of the above US GAAP adjustments
|
1,089,033 | 832,523 | 430,476 | 13,140 | ||||||||||||
l)
Valuation allowance for deferred tax assets related to the above US GAAP
adjustments
|
(1,089,033 | ) | (17,489 | ) | (80,789 | ) | (2,466 | ) | ||||||||
l)
10% surtax on undistributed retained earnings and others
|
9,086 | (1,780,248 | ) | 1,699,802 | 51,887 | |||||||||||
Net
income, US GAAP
|
1,173,208 | 45,355,480 | 13,089,654 | 399,562 | ||||||||||||
For
the year ended December 31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands, except for per share data)
|
||||||||||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
0.17 | 5.56 | 1.57 | 0.05 | ||||||||||||
Diluted
|
0.17 | 5.32 | 1.53 | 0.05 | ||||||||||||
Weighted-average
number of shares outstanding (in thousands):
|
||||||||||||||||
Basic
|
6,882,566 | 8,164,667 | 8,355,989 | |||||||||||||
Diluted
|
6,882,626 | 8,561,409 | 8,560,801 | |||||||||||||
|
(2)
Reconciliation of consolidated stockholders’
equity
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Equity
attributable to stockholders of the parent company, ROC
GAAP
|
291,778,965 | 290,058,971 | 8,854,059 | |||||||||
a)
Purchase method of accounting for acquisition of Unipac
|
||||||||||||
-
Goodwill
|
10,946,732 | 10,946,732 | 334,149 | |||||||||
-
Intangible assets, net of amortization
|
1,049,496 | - | - | |||||||||
-
Other assets
|
(4,961 | ) | (27,227 | ) | (831 | ) | ||||||
b)
Compensation
|
||||||||||||
-
Accrued remuneration to directors and supervisors
|
(152,000 | ) | - | - | ||||||||
-
Accrued employee bonuses
|
(4,573,000 | ) | - | - | ||||||||
c)
Subsidiaries and long-term equity investments
|
113,135 | (2,004,853 | ) | (61,198 | ) | |||||||
c)
Cumulative translation adjustments
|
(5,845 | ) | (11,086 | ) | (338 | ) | ||||||
d)
Convertible bonds
|
(1,275,935 | ) | - | - | ||||||||
f)
Defined benefit plan
|
||||||||||||
-
Accrued pension cost
|
(24,972 | ) | 17,587 | 537 | ||||||||
-
Recognition of funded status under US SFAS No. 158
|
(181,113 | ) | (207,207 | ) | (6,325 | ) | ||||||
g)
Accumulated depreciation of buildings
|
(4,551,648 | ) | (6,279,693 | ) | (191,688 | ) | ||||||
i)
Accrued compensated absences
|
(242,176 | ) | (161,706 | ) | (4,936 | ) | ||||||
k) Accrued
rental expense and adjustment to land cost
|
(100,797 | ) | (98,668 | ) | (3,012 | ) | ||||||
l)
Deferred income tax assets and liabilities
|
(910,059 | ) | 1,159,018 | 35,379 | ||||||||
Total
stockholders’ equity, US GAAP
|
291,865,822 | 293,391,868 | 8,955,796 |
|
(r)
|
US
GAAP condensed consolidated financial
statements
|
|
(1)
Condensed consolidated balance
sheets
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Assets
|
||||||||||||
Current
assets
|
215,928,964 | 145,522,348 | 4,442,074 | |||||||||
Long-term
investments
|
8,599,901 | 6,469,741 | 197,489 | |||||||||
Property,
plant and equipment, net
|
361,197,229 | 383,958,143 | 11,720,334 | |||||||||
Goodwill
and intangible assets
|
30,334,693 | 26,399,359 | 805,841 | |||||||||
Other
assets
|
7,594,249 | 6,636,001 | 202,565 | |||||||||
Total
Assets
|
623,655,036 | 568,985,592 | 17,368,303 | |||||||||
Liabilities,
Minority Interests and Stockholders’ Equity
|
||||||||||||
Current
liabilities
|
180,765,111 | 152,647,199 | 4,659,560 | |||||||||
Long-term
liabilities
|
142,182,091 | 115,209,312 | 3,516,768 | |||||||||
Minority
interests
|
8,842,012 | 7,737,213 | 236,179 | |||||||||
Stockholders’
equity
|
291,865,822 | 293,391,868 | 8,955,796 | |||||||||
Total
Liabilities, Minority Interests and Stockholders’ Equity
|
623,655,036 | 568,985,592 | 17,368,303 |
|
(2)
Condensed consolidated statements of
income
|
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Net
sales
|
293,106,770 | 480,184,256 | 423,928,193 | 12,940,421 | ||||||||||||
Cost
of goods sold
|
269,734,794 | 407,004,913 | 380,968,342 | 11,629,070 | ||||||||||||
Gross
profit
|
23,371,976 | 73,179,343 | 42,959,851 | 1,311,351 | ||||||||||||
Operating
expenses
|
15,819,338 | 21,328,332 | 22,811,722 | 696,328 | ||||||||||||
Operating
income
|
7,552,638 | 51,851,011 | 20,148,129 | 615,023 | ||||||||||||
Non-operating
expenses, net
|
(5,330,269 | ) | (3,416,728 | ) | (4,061,975 | ) | (123,992 | ) | ||||||||
Earnings
before income tax and minority interests
|
2,222,369 | 48,434,283 | 16,086,154 | 491,031 | ||||||||||||
Income
tax expense
|
1,059,238 | 3,053,124 | 2,579,576 | 78,742 | ||||||||||||
Income
before minority interests
|
1,163,131 | 45,381,159 | 13,506,578 | 412,289 | ||||||||||||
Minority
interests in income (losses)
|
(10,077 | ) | 25,679 | 416,924 | 12,727 | |||||||||||
Net
income
|
1,173,208 | 45,355,480 | 13,089,654 | 399,562 |
|
(3)
Condensed consolidated statements of comprehensive
income
|
For the year ended December
31,
|
|||||||
2006
|
2007
|
2008
|
|||||
NT$
|
NT$
|
NT$
|
US$
|
||||
(in
thousands)
|
|||||||
Net
income
|
1,173,208 | 45,355,480 | 13,089,654 | 399,562 | ||||||||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||||
Derivative
and hedging activities
|
(104,907 | ) | 290,193 | (727,376 | ) | (22,203 | ) | |||||||||
Unrealized
gains (losses) on securities
|
292,017 | 1,436,558 | (1,693,174 | ) | (51,684 | ) | ||||||||||
Cumulative
translation adjustments
|
327,996 | 646,134 | 1,277,232 | 38,987 | ||||||||||||
Defined
benefit plan
|
- | 110,991 | (18,548 | ) | (566 | ) | ||||||||||
Other
comprehensive income (loss)
|
515,106 | 2,483,876 | (1,161,866 | ) | (35,466 | ) | ||||||||||
Comprehensive
income
|
1,688,314 | 47,839,356 | 11,927,788 | 364,096 |
|
(4)
Condensed consolidated statements of cash
flows
|
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Net
cash provided by (used in):
|
||||||||||||||||
Operating
activities
|
67,955,306 | 156,942,207 | 132,044,194 | 4,030,653 | ||||||||||||
Investing
activities
|
(83,130,667 | ) | (66,313,691 | ) | (101,242,355 | ) | (3,090,426 | ) | ||||||||
Financing
activities
|
32,951,652 | (44,816,566 | ) | (37,473,199 | ) | (1,143,870 | ) | |||||||||
Effect
of exchange rate change on
cash and cash equivalents
|
(114,291 | ) | 152,392 | 216,450 | 6,607 | |||||||||||
Net
change in cash and cash equivalents
|
17,662,000 | 45,964,342 | (6,454,910 | ) | (197,036 | ) | ||||||||||
Cash
and cash equivalents at
beginning of year
|
26,263,265 | 43,925,265 | 89,889,607 | 2,743,883 | ||||||||||||
Cash
and cash equivalents at
end of year
|
43,925,265 | 89,889,607 | 83,434,697 | 2,546,847 |
|
(s)
|
Additional
US GAAP disclosure
|
|
(1)
Available-for-sale securities
|
Total
unrealized |
Total
unrealized
|
|||||||||||||||
Cost*
|
Fair value
|
gains
|
losses
|
|||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Current
assets:
|
||||||||||||||||
As
of December 31, 2007
|
1,417,453 | 1,347,131 | 17,349 | 87,671 | ||||||||||||
As
of December 31, 2008
|
504,823 | 470,301 | - | 34,522 | ||||||||||||
Long-term
investments:
|
||||||||||||||||
As
of December 31, 2007
|
489,610 | 2,123,631 | 1,659,294 | 25,273 | ||||||||||||
As
of December 31, 2008
|
592,697 | 595,750 | 137,343 | 134,290 |
Proceeds
|
Gross
realized |
Gross
realized
|
||||||||||
from sales
|
gains
|
losses
|
||||||||||
NT$
|
NT$
|
NT$
|
||||||||||
(in
thousands)
|
||||||||||||
For
the year ended December 31, 2006
|
- | - | - | |||||||||
For
the year ended December 31, 2007
|
29,956 | 15,714 | - | |||||||||
For
the year ended December 31, 2008
|
270,250 | 40,475 | 58 |
|
(2)
Allowance for doubtful accounts, and sales returns and discounts
(including related parties)
|
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Allowance
for doubtful accounts, and sales returns and discounts:
|
||||||||||||||||
Balance
at beginning of year
|
505,508 | 1,307,549 | 1,572,216 | 47,992 | ||||||||||||
Allowance
assumed from merger with QDI
|
248,056 | - | - | - | ||||||||||||
Provisions
charged to earnings
|
2,601,072 | 4,093,943 | 2,606,922 | 79,576 | ||||||||||||
Write-offs
|
(2,047,087 | ) | (3,829,277 | ) | (2,934,670 | ) | (89,581 | ) | ||||||||
Balance
at end of year
|
1,307,549 | 1,572,215 | 1,244,468 | 37,987 |
|
(3)
Pension-related benefits
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Projected
benefit obligation at beginning of year
|
970,987 | 984,913 |
30,064
|
|||||||||
Service
cost
|
9,264 | 8,116 |
248
|
|||||||||
Interest
cost
|
26,679 | 29,548 |
902
|
|
||||||||
Actuarial
loss (gain)
|
(22,017 | ) | 36,303 |
1,108
|
||||||||
Curtailment
|
- | (1,503 | ) | (46 | ) | |||||||
Projected
benefit obligation at end of year
|
984,913 | 1,057,377 | 32,276 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Fair
value of plan assets at beginning of year
|
799,999 | 947,714 | 28,929 | |||||||||
Actual
return on plan assets
|
18,601 | 30,264 | 924 | |||||||||
Actual
contributions
|
129,114 | 133,128 | 4,064 | |||||||||
Fair
value of plan assets at end of year
|
947,714 | 1,111,106 | 33,917 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Funded
status-plan assets more (less) than benefit obligations
|
(37,198 | ) | 53,730 | 1,640 | ||||||||
Prepaid
pension cost (accrued liability)
|
(37,198 | ) | 53,730 | 1,640 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Accrued
liability at beginning of year
|
(170,988 | ) | (37,198 | ) | (1,136 | ) | ||||||
Net
periodic benefit cost
|
(24,397 | ) | (15,661 | ) | (478 | ) | ||||||
Actual
contributions
|
129,114 | 133,128 | 4,064 | |||||||||
Pension
liability adjustments under US SFAS No. 158
|
29,073 | (26,539 | ) | (810 | ) | |||||||
Prepaid
pension cost (accrued liability) at end of year
|
(37,198 | ) | 53,730 | 1,640 |
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Service
cost
|
8,100 | 9,264 | 8,116 | 248 | ||||||||||||
Interest
cost
|
20,508 | 26,679 | 29,547 | 902 | ||||||||||||
Expected
return on plan assets
|
(15,208 | ) | (22,031 | ) | (28,408 | ) | (867 | ) | ||||||||
Amortization
of net transition cost
|
472 | 323 | 288 | 9 | ||||||||||||
Recognized
net actuarial loss
|
1,512 | 10,162 | 6,118 | 186 | ||||||||||||
Net
periodic benefit cost
|
15,384 | 24,397 | 15,661 | 478 |
December 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Discount
rate
|
2.75 | % | 3.00 | % | 2.50 | % | ||||||
Rate
of increase in compensation levels
|
3.50 | % | 2.00% –3.50 | % | 2.50% – 3.00 | % |
For the year ended December
31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Discount
rate
|
3.50 | % | 2.50% – 2.75 | % | 3.00 | % | ||||||
Rate
of increase in compensation levels
|
3.50 | % | 2.00% – 3.50 | % | 2.00% – 3.50 | % | ||||||
Expected
long-term rate of return on plan assets
|
2.75 | % | 2.50% – 3.00 | % | 2.50 | % |
Year
|
Retirement benefit payments
|
||||||||
NT$
|
US$
|
||||||||
(in
thousands)
|
|||||||||
2009
|
8,710 | 266 | |||||||
2010
|
- | - | |||||||
2011
|
32,186 | 982 | |||||||
2012
|
10,947 | 334 | |||||||
2013
|
10,034 | 306 | |||||||
2014-2018
|
233,555 | 7,129 |
|
(4)
|
Income
taxes
|
|
(i)
|
The
components of the provision for income tax expense (benefit) are
summarized as follows:
|
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Current
income tax expense
|
1,218,824 | 4,493,225 | 2,205,215 | 67,314 | ||||||||||||
Deferred
income tax expense (benefit)
|
(159,586 | ) | (1,440,101 | ) | 374,361 | 11,428 | ||||||||||
Income
tax expense
|
1,059,238 | 3,053,124 | 2,579,576 | 78,742 |
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Expected
income tax expense
|
555,592 | 12,108,571 | 4,021,538 | 122,758 | ||||||||||||
Increase
in investment tax credits, net of expired portion
|
(4,359,577 | ) | (2,685,794 | ) | (8,506,844 | ) | (259,672 | ) | ||||||||
Change
in valuation allowance
|
3,681,893 | (7,645,980 | ) | 4,937,090 | 150,705 | |||||||||||
Tax
exemption
|
(838,410 | ) | (6,085,443 | ) | (2,975,267 | ) | (90,820 | ) | ||||||||
Employee
bonuses
|
1,037,534 | 1,789,298 | 1,630,135 | 49,760 | ||||||||||||
Tax
on undistributed retained earnings
|
910,347 | 5,641,777 | 2,126,739 | 64,919 | ||||||||||||
Impairment
loss on domestic marketable securities and domestic equity-method
investee
|
65,708 | - | 939,881 | 28,690 | ||||||||||||
Non-deductible
expense and others
|
6,151 | (69,305 | ) | 406,304 | 12,402 | |||||||||||
Income
tax expense
|
1,059,238 | 3,053,124 | 2,579,576 | 78,742 |
|
(ii)
|
The
components of deferred income tax assets and liabilities are summarized as
follows:
|
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Deferred
tax assets:
|
||||||||||||
Inventories
|
750,598 | 2,078,665 | 63,451 | |||||||||
Unrealized
loss and expenses
|
730,009 | 1,882,249 | 57,456 | |||||||||
Other
current liabilities
|
1,654,481 | 876,378 | 26,751 | |||||||||
Investment
tax credits
|
16,311,898 | 20,416,402 | 623,211 | |||||||||
Net
operating loss carryforwards
|
710,015 | 256,900 | 7,842 | |||||||||
Convertible
bonds
|
431,137 | 32,943 | 1,006 | |||||||||
Property,
plant and equipment
|
1,445,110 | 2,088,558 | 63,753 | |||||||||
Others
|
315,676 | 564,672 | 17,237 | |||||||||
Gross
deferred tax assets
|
22,348,924 | 28,196,767 | 860,707 | |||||||||
Valuation
allowance
|
(13,516,141 | ) | (16,624,849 | ) | (507,474 | ) | ||||||
Net
deferred tax assets
|
8,832,783 | 11,571,918 | 353,233 |
December 31,
|
|||||||||
2007
|
2008
|
||||||||
NT$
|
NT$
|
US$
|
|||||||
(in
thousands)
|
Deferred
tax liabilities:
|
||||||||||||
Long-term
investment—equity method
|
(492,664 | ) | (1,035,489 | ) | (31,608 | ) | ||||||
Goodwill
|
(140,651 | ) | (765,906 | ) | (23,379 | ) | ||||||
Cumulative
translation adjustments
|
(348,543 | ) | (773,427 | ) | (23,609 | ) | ||||||
Others
|
(285,628 | ) | (452,256 | ) | (13,805 | ) | ||||||
Total
deferred tax liabilities
|
(1,267,486 | ) | (3,027,078 | ) | (92,401 | ) | ||||||
|
||||||||||||
Net
deferred tax assets
|
7,565,297 | 8,544,840 | 260,832 |
December 31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Deferred
tax assets–current
|
5,181,516 | 4,877,051 | 148,872 | |||||||||
Deferred
tax assets–noncurrent
|
3,653,125 | 6,556,452 | 200,136 | |||||||||
Deferred
tax liabilities–current
|
(160,332 | ) | (267,355 | ) | (8,161 | ) | ||||||
Deferred
tax liabilities–noncurrent
|
(1,109,012 | ) | (2,621,308 | ) | (80,015 | ) | ||||||
7,565,297 | 8,544,840 | 260,832 |
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Income
tax expense from continuing operations
|
1,059,238 | 3,053,124 | 2,579,576 | 78,742 | ||||||||||||
Other
comprehensive income
|
- | 331,665 | 183,268 | 5,594 | ||||||||||||
Tax
benefit allocated to reduce goodwill
|
- | (1,215,980 | ) | (1,524,387 | ) | (46,532 | ) | |||||||||
Total
income tax expense
|
1,059,238 | 2,168,809 | 1,238,457 | 37,804 |
For the year ended December
31,
|
||||||||||||
2007
|
2008
|
|||||||||||
NT$
|
NT$
|
US$
|
||||||||||
(in
thousands)
|
||||||||||||
Balance
at beginning of year
|
- | 709,134 | 21,646 | |||||||||
Increase
related to prior-year tax positions
|
709,134 | - | - | |||||||||
Decrease
related to prior-year tax positions
|
- | (309,327 | ) | (9,442 | ) | |||||||
Settlements
|
- | (399,807 | ) | (12,204 | ) | |||||||
Balance
at end of year
|
709,134 | - | - |
(5)
|
Property,
plant and equipment
|
December 31, 2007
|
||||||||||||
Cost
|
Accumulated
depreciation
|
Carrying
amount
|
||||||||||
NT$
|
NT$
|
NT$
|
||||||||||
(in
thousands)
|
||||||||||||
Land
|
6,187,337 | - | 6,187,337 | |||||||||
Buildings
|
70,963,869 | (12,196,263 | ) | 58,767,606 | ||||||||
Machinery
and equipment
|
473,796,707 | (202,364,144 | ) | 271,432,563 | ||||||||
Other
equipment and general assets
|
28,838,990 | (20,326,279 | ) | 8,512,711 | ||||||||
Construction
in progress
|
8,323,471 | - | 8,323,471 | |||||||||
Prepayments
for purchases of land and equipment
|
7,973,541 | - | 7,973,541 | |||||||||
596,083,915 | (234,886,686 | ) | 361,197,229 |
December 31, 2008
|
||||||||||||
Cost
|
Accumulated
depreciation
|
Carrying
amount
|
||||||||||
NT$
|
NT$
|
NT$
|
||||||||||
(in
thousands)
|
||||||||||||
Land
|
6,187,337 | - | 6,187,337 | |||||||||
Buildings
|
72,120,009 | (16,159,543 | ) | 55,960,466 | ||||||||
Machinery
and equipment
|
509,371,848 | (268,798,291 | ) | 240,573,557 | ||||||||
Other
equipment and general assets
|
37,233,663 | (28,481,052 | ) | 8,752,611 | ||||||||
Construction
in progress
|
12,299,311 | - | 12,299,311 | |||||||||
Prepayments
for purchases of land and equipment
|
60,184,861 | - | 60,184,861 | |||||||||
697,397,029 | (313,438,886 | ) | 383,958,143 |
(6)
|
The
changes in the components of accumulated other comprehensive income (loss)
were as follows:
|
Derivative
and
hedging
activities
|
Unrealized
gains
(losses)
on
securities
|
Cumulative
translation
adjustments
|
Defined
benefit
plan
|
Accumulated
other
comprehensive
income (loss)
|
||||||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
NT$
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Balance
at December 31, 2005
|
- | (146,410 | ) | 71,935 | - | (74,475 | ) | |||||||||||||
Net
current-period change
|
(104,907 | ) | 292,017 | 327,996 | - | 515,106 | ||||||||||||||
Adoption
of US SFAS No. 158
|
- | - | - | (234,510 | ) | (234,510 | ) | |||||||||||||
Balance
at December 31, 2006
|
(104,907 | ) | 145,607 | 399,931 | (234,510 | ) | 206,121 | |||||||||||||
Net
current-period change
|
290,193 | 1,436,558 | 646,134 | 110,991 | 2,483,876 | |||||||||||||||
Balance
at December 31, 2007
|
185,286 | 1,582,165 | 1,046,065 | (123,519 | ) | 2,689,997 | ||||||||||||||
Net
current-period change
|
(727,376 | ) | (1,693,174 | ) | 1,277,232 | (18,548 | ) | (1,161,866 | ) | |||||||||||
Balance
at December 31, 2008
|
(542,090 | ) | (111,009 | ) | 2,323,297 | (142,067 | ) | 1,528,131 | ||||||||||||
For the year ended December 31,
2006
|
||||||||||||
Before
tax
amount
|
Tax
(expense)
benefit
|
Net-of-tax
amount
|
||||||||||
NT$
|
NT$
|
NT$
|
||||||||||
Derivative
and hedging activities
|
(104,907 | ) | - | (104,907 | ) | |||||||
Unrealized
gains on securities
|
292,017 | - | 292,017 | |||||||||
Cumulative
translation adjustments
|
327,996 | - | 327,996 | |||||||||
Net
current-period changes
|
515,106 | - | 515,106 |
For the year ended December 31,
2007
|
||||||||||||
Before
tax
amount
|
Tax
(expense)
benefit
|
Net-of-tax
amount
|
||||||||||
NT$
|
NT$
|
NT$
|
||||||||||
Derivative
and hedging activities
|
357,891 | (67,698 | ) | 290,193 | ||||||||
Unrealized
gains on securities
|
1,436,558 | - | 1,436,558 | |||||||||
Cumulative
translation adjustments
|
893,121 | (246,987 | ) | 646,134 | ||||||||
Defined
benefit plan
|
127,971 | (16,980 | ) | 110,991 | ||||||||
Net
current-period changes
|
2,815,541 | (331,665 | ) | 2,483,876 |
For the year ended December 31,
2008
|
||||||||||||
Before
tax
amount
|
Tax
(expense)
benefit
|
Net-of-tax
amount
|
||||||||||
NT$
|
NT$
|
NT$
|
||||||||||
Derivative
and hedging activities
|
(961,446 | ) | 234,070 | (727,376 | ) | |||||||
Unrealized
losses on securities
|
(1,693,174 | ) | - | (1,693,174 | ) | |||||||
Cumulative
translation adjustments
|
1,702,116 | (424,884 | ) | 1,277,232 | ||||||||
Defined
benefit plan
|
(26,094 | ) | 7,546 | (18,548 | ) | |||||||
Net
current-period changes
|
(978,598 | ) | (183,268 | ) | (1,161,866 | ) |
(7)
|
Product
revenue information
|
For the year ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Panels
for computer products:
|
||||||||||||||||
Panels
for notebook computers
|
46,897 | 89,031 | 81,100 | 2,475 | ||||||||||||
Panels
for desktop monitors
|
100,576 | 133,278 | 93,097 | 2,842 | ||||||||||||
Total
panels for computer products
|
147,473 | 222,309 | 174,197 | 5,317 | ||||||||||||
Panels
for LCD televisions
|
104,794 | 200,573 | 188,162 | 5,744 | ||||||||||||
Panels
for consumer electronics products
|
31,290 | 43,023 | 42,599 | 1,300 | ||||||||||||
Panels
for industrial products
|
7,862 | 11,988 | 13,665 | 417 | ||||||||||||
Other(1)
|
1,688 | 2,291 | 5,305 | 162 | ||||||||||||
Total
|
293,107 | 480,184 | 423,928 | 12,940 |
|
(1)
|
Includes
revenues generated from sales of raw materials, components, and other
TFT-LCD panel products, and from service
charges.
|
(8)
|
Basic
and diluted EPS
|
For the year ended December
31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
NT$
|
NT$
|
NT$
|
||||||||||
(in
thousands, except for per share data)
|
||||||||||||
Net
income
|
1,173,208 | 45,355,480 | 13,089,654 | |||||||||
Weighted-average
number of shares outstanding during the year–retroactively
adjusted:
|
||||||||||||
Shares
of common stock at beginning of year
|
5,830,547 | 7,573,403 | 7,865,201 | |||||||||
Common
stock issued in connection with the merger with QDI
|
372,817 | - | - | |||||||||
Employee
stock options
|
41 | 1,138 | 419 | |||||||||
Issuance
of common stock for conversion of bonds
|
- | 26,126 | 2,398 | |||||||||
Issuance
of shareholders’ stock dividends and employee stock bonus
|
223,467 | 175,206 | 487,971 | |||||||||
Retroactive
adjustment for capitalization of retained earnings
|
455,694 | 388,794 | - | |||||||||
6,882,566 | 8,164,667 | 8,355,989 | ||||||||||
Basic
EPS:
|
||||||||||||
Net
income
|
0.17 | 5.56 | 1.57 |
For the year ended December 31, | ||||||||||||
2006
|
2007
|
2008
|
||||||||||
NT$
|
NT$
|
NT$
|
||||||||||
(in thousands, except for per share data) | ||||||||||||
Net
income for computing diluted EPS:
|
||||||||||||
Net
income
|
1,173,208 | 45,355,480 | 13,089,654 | |||||||||
Effect
of dilutive potential common stock related to convertible
bonds
|
- | 208,622 | 39,792 | |||||||||
1,173,208 | 45,564,102 | 13,129,446 | ||||||||||
Weighted-average
number of shares outstanding during the year–retroactively adjusted
(including the effect of dilutive potential common stock):
|
||||||||||||
Shares
of common stock at beginning of year
|
5,830,547 | 7,573,403 | 7,865,201 | |||||||||
Common
stock issued in connection with the merger with QDI
|
372,817 | - | - | |||||||||
Employee
stock options
|
41 | 1,138 | 419 | |||||||||
Issuance
of common stock for conversion of bonds
|
- | 26,126 | 2,398 | |||||||||
Issuance
of shareholders’ stock dividends and employee stock bonus
|
223,467 | 175,205 | 487,971 | |||||||||
Effect
of dilutive potential common stock related to stock
options
|
56 | 547 | 104 | |||||||||
Effect
of dilutive potential common stock related convertible
bonds
|
- | 377,304 | 204,708 | |||||||||
Retroactive
adjustment of capitalization of retained earnings
|
455,698 | 407,686 | - | |||||||||
6,882,626 | 8,561,409 | 8,560,801 | ||||||||||
Diluted
EPS:
|
||||||||||||
Net
income
|
0.17 | 5.32 | 1.53 |
(9)
|
Goodwill
and other intangible assets
|
For the year ended December
31,
|
|||||||||||||
2007
|
2008
|
||||||||||||
NT$
|
NT$
|
US$
|
|||||||||||
(in
thousands)
|
|||||||||||||
Balance
at beginning of year
|
25,234,740 | 23,751,714 | 725,022 | ||||||||||
Adjustment
to goodwill acquired through merger with QDI
|
(267,046 | ) | - | - | |||||||||
Tax
benefit allocated to reduce goodwill
|
(1,215,980 | ) | (1,524,387 | ) | (46,532 | ) | |||||||
Balance
at end of year
|
23,751,714 | 22,227,327 | 678,490 |
December 31, 2007
|
||||||||||||
Cost
|
Accumulated
amortization
|
Carrying
amount
|
||||||||||
NT$
|
NT$
|
NT$
|
||||||||||
(in
thousands)
|
||||||||||||
Amortizable
intangible assets:
|
||||||||||||
Patents
and licensing fees
|
22,439,097 | 18,000,276 | 4,438,821 | |||||||||
Core
technologies
|
3,675,700 | 1,531,542 | 2,144,158 | |||||||||
26,114,797 | 19,531,818 | 6,582,979 |
December 31, 2008
|
||||||||||||||||
Cost
|
Accumulated
amortization
|
Carrying amount
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Amortizable
intangible assets:
|
||||||||||||||||
Patents
and licensing fees
|
22,842,711 | 19,589,604 | 3,253,107 | 99,301 | ||||||||||||
Core
technologies
|
3,675,700 | 2,756,775 | 918,925 | 28,050 | ||||||||||||
26,518,411 | 22,346,379 | 4,172,032 | 127,351 |
Year
|
December 31, 2008
|
|||||||
NT$
|
US$
|
|||||||
(in
thousands)
|
||||||||
2009
|
1,619,035 | 49,421 | ||||||
2010
|
608,182 | 18,565 | ||||||
2011
|
353,974 | 10,805 | ||||||
2012
|
341,338 | 10,419 | ||||||
2013
|
312,678 | 9,544 | ||||||
Thereafter
|
936,825 | 28,597 | ||||||
Total
|
4,172,032 | 127,351 |
(10)
|
Fair
value measurements
|
|
●
|
Level
1 inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company has the ability to access at the
measurement date. Assets utilizing Level 1 inputs include
available-for-sale securities that are actively
traded.
|
|
●
|
Level
2 inputs are quoted prices in markets that are not active or for which all
significant input are observable, either directly or
indirectly. Assets and liabilities utilizing Level 2 inputs
include interest rate swap contracts, foreign currency forward contracts
and embedded derivative financial
instruments.
|
|
●
|
Level
3 inputs are unobservable
inputs.
|
Fair value measurements at reporting date
using
|
||||||||||||||||
|
December
31,
2008
|
Quoted
prices in
active
market for
identical
assets
(Level 1)
|
Significant
other
observable
inputs
(Level 2)
|
Significant
unobservable
inputs
(Level 3)*
|
||||||||||||
NT$
|
NT$
|
NT$
|
NT$
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale
financial assets–current
|
470,301 | 470,301 | - | - | ||||||||||||
Foreign
currency forward contracts
|
1,067,531 | - | 1,067,531 | - | ||||||||||||
Interest
rate swap contracts
|
5,398 | - | 5,398 | - | ||||||||||||
Available-for-sale
financial assets–noncurrent
|
595,750 | 595,750 | - | - | ||||||||||||
Liabilities:
|
- | |||||||||||||||
Foreign
currency forward contracts
|
28,831 | - | 28,831 | - | ||||||||||||
Interest
rate swap contracts
|
829,389 | - | 829,389 | - | ||||||||||||
Embedded
derivative instrument liabilities
|
- | - | - | - |
(11)
|
Summarized
US GAAP financial information about equity-method
investees
|
As of and for the years ended December
31,
|
||||||||||||||||
2006
|
2007
|
2008
|
||||||||||||||
NT$
|
NT$
|
NT$
|
US$
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Current
assets
|
75,622 | 79,801 | 92,391 | 2,820 | ||||||||||||
Noncurrent
assets
|
88,245 | 70,662 | 80,219 | 2,449 | ||||||||||||
Current
liabilities
|
80,065 | 67,516 | 85,029 | 2,596 | ||||||||||||
Long-term
liabilities
|
28,734 | 34,579 | 30,836 | 941 | ||||||||||||
Minority
interests
|
4,010 | 3,806 | 7,737 | 236 | ||||||||||||
Stockholders’
equity
|
51,058 | 44,562 | 49,008 | 1,496 | ||||||||||||
Net
sales
|
255,970 | 190,185 | 210,901 | 6,438 | ||||||||||||
Gross
profit
|
20,958 | 19,615 | 16,667 | 509 | ||||||||||||
Net
income (loss)
|
(31,908 | ) | 5,597 | (7,524 | ) | (230 | ) |