BALANCE SHEETS JUNE 30, 2010 AND 2009 (In Thousands of New Taiwan Dollars, Except Par Value) ASSETS Amount % Amount % LIABILITIES AND STOCKHOLDERS EQUITY Amount % Amount % CURRENT ASSETS CURRENT LIABILITIES Cash and cash equivalents (Note 4) $ 5,034,954 7 $ 5,107,646 7 Financial liabilities at fair value through profit or loss (Note 5) $ 10,861 - $ 3,883 - Financial assets at fair value through profit or loss (Note 5) 4,581,065 7 6,921,296 9 Accounts payable 8,799,195 13 10,141,672 13 Accounts receivable, net (Note 7) 7,204,583 11 5,566,508 7 Payable to related parties (Note 23) 1,754,567 3 1,945,512 3 Receivable from related parties (Note 23) 5,783,129 9 4,641,297 6 Accrued expenses (Note 23) 2,955,005 4 1,175,640 2 Other receivable 263,517-243,977 1 Other payable to related parties (Note 23) 1,296,295 2 436,160 1 Other receivable from related parties (Note 23) 4,048,073 6 3,155,504 4 Payable for equipment purchased 213,295-458,589 1 Inventories (Note 8) 4,256,876 6 4,644,361 6 Other payable 3,461,074 5 1,933,904 2 Pledged time deposits (Note 24) 107,031 - - - Liability component of preferred stock (Note 16) 3,170,250 5 3,161,963 4 Other current assets 623,213 1 913,478 1 Current portion of long-term debt (Notes 15 and 24) 3,170,860 5 4,735,993 6 Other current liabilities 255,714-128,360 - Total current assets 31,902,441 47 31,194,067 41 Total current liabilities 25,087,116 37 24,121,676 32 LONG-TERM INVESTMENTS Investments accounted for under equity method (Note 9) 8,346,798 12 7,449,067 10 LONG-TERM LIABILITIES Available-for-sale financial assets 1,677-917 - Long-term debt (Notes 15 and 24) 1,657,000 3 4,850,860 6 Hedging derivative assets (Note 6) - - 15,026 - Hedging derivative liabilities (Note 6) 23,570 - - - Financial assets carried at cost (Note 10) 2,327,966 4 930,290 1 Total long-term liabilities 1,680,570 3 4,850,860 6 Total long-term investments 10,676,441 16 8,395,300 11 OTHER LIABILITIES PROPERTIES (Notes 11, 23 and 24) Deferred credits (Note 23) 60,518-54,787 - Cost Buildings 4,044,187 6 4,546,441 6 Total liabilities 26,828,204 40 29,027,323 38 Machinery and equipment 59,698,800 88 60,665,350 79 Transportation equipment 9,438-9,827 - STOCKHOLDERS EQUITY (Note 16) Furniture and equipment 280,400 1 447,903 - Common stock, $10 par value, authorized: 9,000,000,000 shares; Leasehold improvements 1,345-9,705 - issued: 5,224,431,616 shares in 2010 and 5,224,359,616 shares in Total cost 64,034,170 95 65,679,226 85 2009 52,244,316 77 52,243,596 68 Less: Accumulated depreciation 49,424,477 73 40,914,867 53 Capital surplus 4,416,621 6 4,249,677 5 14,609,693 22 24,764,359 32 Retained earnings (accumulated losses) Construction in progress and prepayments for equipment, net 8,898,165 13 10,883,205 14 Legal reserve 1,437,949 2 1,437,949 2 Deficit (17,231,774) (25) (10,085,098) (13) Properties, net 23,507,858 35 35,647,564 46 Others Cumulative translation adjustments 119,528-153,788 - INTANGIBLE ASSETS Unrealized loss on financial instruments (4,963) - (5,723) - System software costs, net (Note 12) 33,111-16,765 - Prepaid pension cost 64,678-61,646 - Total stockholders equity 40,981,677 60 47,994,189 62 Deferred technology transfer and license fees, net (Notes 12 and 25) 705,538 1 767,967 1 Total intangible assets 803,327 1 846,378 1 OTHER ASSETS Idle assets, net (Note 13) 863,866 1 892,431 1 Deferred charges, net (Note 14) 46,888-23,513 - Others (Note 23) 9,060-22,259 - Total other assets 919,814 1 938,203 1 TOTAL $ 67,809,881 100 $ 77,021,512 100 TOTAL $ 67,809,881 100 $ 77,021,512 100
STATEMENTS OF INCOME (In Thousands of New Taiwan Dollars, Except Loss Per Share) Amount % Amount % GROSS SALES (Note 23) $ 32,175,068 101 $ 19,706,654 103 LESS: SALES RETURNS AND DISCOUNTS (Note 23) 263,620 1 636,888 3 NET SALES 31,911,448 100 19,069,766 100 COST OF GOODS SOLD (Notes 20 and 23) 30,136,835 95 24,133,149 126 GROSS PROFIT (LOSS) BEFORE ADJUSTMENTS 1,774,613 5 (5,063,383) (26) UNREALIZED PROFIT - INTERCOMPANY (21,316) - - - REALIZED PROFIT - INTERCOMPANY 4,433 - - - GROSS PROFIT (LOSS) 1,757,730 5 (5,063,383) (26) OPERATING EXPENSES (Notes 20 and 23) Selling 1,118,362 3 965,677 5 General and administrative 394,168 1 383,398 2 Research and development 862,535 3 666,854 4 Total operating expenses 2,375,065 7 2,015,929 11 LOSS FROM OPERATIONS (617,335) (2) (7,079,312) (37) NON-OPERATING INCOME AND GAINS Interest 17,842-27,664 - Gain on disposal of assets, net 131,138-35,140 - Valuation gain on financial instruments, net (Note 5) 189,860 1 194,617 1 Others (Note 23) 57,339-32,986 - Total non-operating income and gains 396,179 1 290,407 1 NON-OPERATING EXPENSES AND LOSSES Interest (Note 23) 59,341-106,919 1 Investment loss recognized under equity method, net (Note 9) 597,616 2 549,754 3 Loss on disposal of assets, net 21,563-21 - Foreign exchange loss, net 349,680 1 89,736 - Dividends on liability component of preferred stock - - 72,632 - Others 82,978-15,474 - (Continued)
STATEMENTS OF INCOME (In Thousands of New Taiwan Dollars, Except Loss Per Share) Amount % Amount % Total non-operating expenses and losses 1,111,178 3 834,536 4 LOSS BEFORE INCOME TAX (1,332,334) (4) (7,623,441) (40) INCOME TAX BENEFIT (Note 19) - - (6,000) - NET LOSS $ (1,332,334) (4) $ (7,617,441) (40) Before Income Tax After Before Income Income Tax Tax After Income Tax LOSS PER SHARE (Note 21) Basic loss per share $ (0.26) $ (0.26) $ (1.46) $ (1.46) (Concluded)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In Thousands of New Taiwan Dollars) Capital Surplus (Note 16) Others Additional Retained Earnings (Accumulated Losses) (Note 16) Unrealized Gain Paid-in Capital - Long-term Cumulative (Loss) on Total Common Stock Issuance of Convertible Stock Options Equity Translation Financial Stockholders (Note 16) Common Stock Bonds (Preferred Stock) Treasury Stock Investments Total Legal Reserve Deficit Total Adjustments Instruments Equity BALANCE, JANUARY 1, 2010 $ 52,244,316 $ 1,597,456 $ 1,458,708 $ 75,769 $ 1,058,688 $ 194,190 $ 4,384,811 $ 1,437,949 $ (15,899,440 ) $ (14,461,491 ) $ 98,717 $ (4,704 ) $ 42,261,649 Changes in unrealized gain or loss on available-for-sale financial assets - - - - - - - - - - - (259) (259) Adjustment of capital surplus for long-term equity investments accounted for under equity method - - - - - 31,810 31,810 - - - - - 31,810 Changes in unrealized gain or loss on hedge of a net investment in a foreign operation - - - - - - - - - - (65,199) - (65,199) Net loss for the six-month period ended June 30, 2010 - - - - - - - - (1,332,334 ) (1,332,334 ) - - (1,332,334 ) Translation adjustment for foreign-currency long-term equity investments - - - - - - - - - - 86,010-86,010 BALANCE, JUNE 30, 2010 $ 52,244,316 $ 1,597,456 $ 1,458,708 $ 75,769 $ 1,058,688 $ 226,000 $ 4,416,621 $ 1,437,949 $ (17,231,774 ) $ (15,793,825 ) $ 119,528 $ (4,963 ) $ 40,981,677 BALANCE, JANUARY 1, 2009 $ 52,243,596 $ 1,597,636 $ 1,458,708 $ 75,769 $ 1,058,688 $ 32,756 $ 4,223,557 $ 1,437,949 $ (2,463,846 ) $ (1,025,897 ) $ 149,631 $ (4,654 ) $ 55,586,233 Changes in unrealized gain or loss on available-for-sale financial assets - - - - - - - - - - - 465 465 Changes in unrealized gain or loss on cash flow hedge - - - - - - - - - - - (1,534 ) (1,534 ) Adjustment of capital surplus and deficit for long-term equity investments accounted for under equity method - - - - - 26,120 26,120 - (3,811) (3,811) - - 22,309 Changes in unrealized gain or loss on hedge of a net investment in a foreign operation - - - - - - - - - - 8,944-8,944 Net loss for the six-month period ended June 30, 2009 - - - - - - - - (7,617,441 ) (7,617,441 ) - - (7,617,441 ) Translation adjustment for foreign-currency long-term equity investments - - - - - - - - - - (4,787) - (4,787) BALANCE, JUNE 30, 2009 $ 52,243,596 $ 1,597,636 $ 1,458,708 $ 75,769 $ 1,058,688 $ 58,876 $ 4,249,677 $ 1,437,949 $ (10,085,098 ) $ (8,647,149 ) $ 153,788 $ (5,723 ) $ 47,994,189
STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (1,332,334) $ (7,617,441) Depreciation 5,231,967 5,206,455 Amortization 160,583 137,608 Investment loss recognized under equity method, net 597,616 549,754 Amortization of dividends on liability component of preferred stock - 25,469 Gain on disposal of assets, net (109,575) (35,119) Changes in operating assets and liabilities Financial instruments at fair value through profit or loss (3,962,106) 3,304,876 Accounts receivable, net (222,530) (752,863) Receivable from related parties (2,513,361) (950,709) Other receivable 91,401 48,522 Other receivable from related parties (2,003,545) (2,596,478) Inventories 168,527 (509,078) Other current assets 130,490 (42,242) Prepaid pension cost (1,817) (528) Accounts payable (184,006) (774,091) Payable to related parties (547,047) 710,697 Accrued expenses (47,817) (158,563) Other payable to related parties 329,832 302,303 Other payable 528,756 1,437,981 Other current liabilities 184,179 23,524 Deferred credits 16,883 - Net cash used in operating activities (3,483,904) (1,689,923) CASH FLOWS FROM INVESTING ACTIVITIES Settlement of hedging derivatives for hedge of a net investment in a foreign operation (9,251) 28,588 Increase in pledged time deposits (82,029) - Increase in long-term equity investments accounted for under equity method (676,431) (769,508) Increase in financial assets carried at cost (30,476) - Acquisition of properties (338,161) (296,285) Proceeds from disposal of properties and idle assets 101,470 295 Increase in intangible assets (20,099) (800) Increase in other assets (35,199) (4,094) Net cash used in investing activities (1,090,176) (1,041,804) CASH FLOWS FROM FINANCING ACTIVITIES Additions to long-term debt - 4,200,000 Repayment of long-term debt (2,301,330) (2,064,664) Net cash provided by (used in) financing activities (2,301,330) 2,135,336 (Continued)
STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) NET DECREASE IN CASH AND CASH EQUIVALENTS (6,875,410) (596,391) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 11,910,364 5,704,037 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,034,954 $ 5,107,646 SUPPLEMENTARY INFORMATION Cash paid for interest $ 62,996 $ 111,359 INVESTING ACTIVITIES INVOLVING BOTH CASH AND NON-CASH ITEMS Acquisition of properties $ 301,599 $ 125,212 Decrease in payable for equipment purchased 36,562 171,073 Cash paid for acquisition of properties $ 338,161 $ 296,285 Proceeds from disposal of properties and idle assets $ 432,754 $ 178,355 Increase in other receivable (331,284) (178,060) Cash received from disposal of properties and idle assets $ 101,470 $ 295 (Concluded)