-1-
-2-
2009 | 2008 | |||||||||||||||
ASSETS | Amount | % | Amount | % | ||||||||||||
CURRENT ASSETS |
||||||||||||||||
Cash and cash equivalents (Notes 2 and 4) |
$ | 117,043,543 | 20 | $ | 138,208,360 | 26 | ||||||||||
Financial assets at fair value through profit or loss (Notes 2, 5
and 23) |
181,743 | | 42,460 | | ||||||||||||
Held-to-maturity financial assets (Notes 2, 7 and 23) |
9,944,843 | 2 | 5,881,999 | 1 | ||||||||||||
Receivables from related parties (Note 24) |
22,541,773 | 4 | 11,728,204 | 2 | ||||||||||||
Notes and accounts receivable |
19,884,520 | 3 | 11,441,176 | 2 | ||||||||||||
Allowance for doubtful receivables (Notes 2 and 8) |
(431,000 | ) | | (436,746 | ) | | ||||||||||
Allowance for sales returns and others (Notes 2 and 8) |
(8,583,632 | ) | (1 | ) | (5,868,582 | ) | (1 | ) | ||||||||
Other receivables from related parties (Note 24) |
246,003 | | 489,742 | | ||||||||||||
Other financial assets (Note 25) |
1,104,072 | | 711,755 | | ||||||||||||
Inventories (Notes 2, 3 and 9) |
18,830,216 | 3 | 12,807,936 | 2 | ||||||||||||
Deferred income tax assets (Notes 2 and 17) |
4,063,410 | 1 | 3,650,700 | 1 | ||||||||||||
Prepaid expenses and other current assets |
1,006,046 | | 1,192,475 | | ||||||||||||
Total current assets |
185,831,537 | 32 | 179,849,479 | 33 | ||||||||||||
LONG-TERM INVESTMENTS (Notes 2, 6, 7, 10, 11 and 23) |
||||||||||||||||
Investments accounted for using equity method |
104,660,098 | 18 | 109,871,178 | 20 | ||||||||||||
Available-for-sale financial assets |
1,046,672 | 1 | 2,032,658 | 1 | ||||||||||||
Held-to-maturity financial assets |
12,219,055 | 2 | 11,761,325 | 2 | ||||||||||||
Financial assets carried at cost |
501,988 | | 519,502 | | ||||||||||||
Total long-term investments |
118,427,813 | 21 | 124,184,663 | 23 | ||||||||||||
PROPERTY, PLANT AND EQUIPMENT (Notes 2, 12 and 24) |
||||||||||||||||
Cost |
||||||||||||||||
Buildings |
124,522,047 | 22 | 114,014,588 | 21 | ||||||||||||
Machinery and equipment |
713,426,126 | 123 | 635,008,261 | 118 | ||||||||||||
Office equipment |
10,781,099 | 2 | 9,748,869 | 2 | ||||||||||||
848,729,272 | 147 | 758,771,718 | 141 | |||||||||||||
Accumulated depreciation |
(627,764,323 | ) | (109 | ) | (557,247,254 | ) | (103 | ) | ||||||||
Advance payments and construction in progress |
33,786,577 | 6 | 17,758,038 | 3 | ||||||||||||
Net property, plant and equipment |
254,751,526 | 44 | 219,282,502 | 41 | ||||||||||||
INTANGIBLE ASSETS |
||||||||||||||||
Goodwill (Note 2) |
1,567,756 | | 1,567,756 | | ||||||||||||
Deferred charges, net (Notes 2 and 13) |
5,891,685 | 1 | 6,401,461 | 1 | ||||||||||||
Total intangible assets |
7,459,441 | 1 | 7,969,217 | 1 | ||||||||||||
OTHER ASSETS |
||||||||||||||||
Deferred income tax assets (Notes 2 and 17) |
7,763,643 | 1 | 6,497,972 | 1 | ||||||||||||
Refundable deposits |
2,698,116 | 1 | 2,719,737 | 1 | ||||||||||||
Others (Note 2) |
494,546 | | 55,677 | | ||||||||||||
Total other assets |
10,956,305 | 2 | 9,273,386 | 2 | ||||||||||||
TOTAL |
$ | 577,426,622 | 100 | $ | 540,559,247 | 100 | ||||||||||
2009 | 2008 | |||||||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY | Amount | % | Amount | % | ||||||||||||
CURRENT LIABILITIES |
||||||||||||||||
Financial liabilities at fair value through profit or loss (Notes 2, 5
and 23) |
$ | | | $ | 83,618 | | ||||||||||
Accounts payable |
9,678,849 | 2 | 4,314,265 | 1 | ||||||||||||
Payables to related parties (Note 24) |
2,039,342 | | 1,202,350 | | ||||||||||||
Income tax payable (Notes 2 and 17) |
8,761,120 | 2 | 9,222,811 | 2 | ||||||||||||
Salary and bonus payable |
8,677,299 | 1 | 1,601,897 | | ||||||||||||
Accrued profit sharing to employees and bonus to directors (Notes 2, 3
and 19) |
6,771,338 | 1 | 15,148,057 | 3 | ||||||||||||
Payables to contractors and equipment suppliers |
28,756,884 | 5 | 7,574,891 | 1 | ||||||||||||
Accrued expenses and other current liabilities (Notes 15 and 23) |
7,886,263 | 1 | 5,951,578 | 1 | ||||||||||||
Current portion of bonds payable (Notes 14 and 23) |
| | 8,000,000 | 2 | ||||||||||||
Total current liabilities |
72,571,095 | 12 | 53,099,467 | 10 | ||||||||||||
LONG-TERM LIABILITIES |
||||||||||||||||
Bonds payable (Notes 14 and 23) |
4,500,000 | 1 | 4,500,000 | 1 | ||||||||||||
Other long-term payables (Notes 15 and 23) |
416,390 | | 931,252 | | ||||||||||||
Total long-term liabilities |
4,916,390 | 1 | 5,431,252 | 1 | ||||||||||||
OTHER LIABILITIES |
||||||||||||||||
Accrued pension cost (Notes 2 and 16) |
3,807,176 | 1 | 3,710,009 | 1 | ||||||||||||
Guarantee deposits (Note 27) |
1,001,376 | | 1,479,152 | | ||||||||||||
Deferred credits (Notes 2 and 24) |
47,873 | | 462,256 | | ||||||||||||
Total other liabilities |
4,856,425 | 1 | 5,651,417 | 1 | ||||||||||||
Total liabilities |
82,343,910 | 14 | 64,182,136 | 12 | ||||||||||||
CAPITAL STOCK NT$10 PAR VALUE (Notes 19 and 21) |
||||||||||||||||
Authorized: 28,050,000 thousand shares |
||||||||||||||||
Issued:
25,902,706 thousand shares in 2009 25,625,437 thousand shares in 2008 |
259,027,066 | 45 | 256,254,373 | 47 | ||||||||||||
CAPITAL SURPLUS (Notes 2 and 19) |
55,486,010 | 10 | 49,875,255 | 9 | ||||||||||||
RETAINED EARNINGS (Note 19) |
||||||||||||||||
Appropriated as legal capital reserve |
77,317,710 | 13 | 67,324,393 | 13 | ||||||||||||
Appropriated as special capital reserve |
| | 391,857 | | ||||||||||||
Unappropriated earnings |
104,564,972 | 18 | 102,337,417 | 19 | ||||||||||||
181,882,682 | 31 | 170,053,667 | 32 | |||||||||||||
OTHERS (Notes 2, 21 and 23) |
||||||||||||||||
Cumulative translation adjustments |
(1,766,667 | ) | | 481,158 | | |||||||||||
Unrealized gain/loss on financial instruments |
453,621 | | (287,342 | ) | | |||||||||||
(1,313,046 | ) | | 193,816 | | ||||||||||||
Total shareholders equity |
495,082,712 | 86 | 476,377,111 | 88 | ||||||||||||
TOTAL |
$ | 577,426,622 | 100 | $ | 540,559,247 | 100 | ||||||||||
-3-
2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
GROSS SALES (Notes 2 and 24) |
$ | 299,471,214 | $ | 330,228,027 | ||||||||||||
SALES RETURNS AND ALLOWANCES (Notes 2 and 8) |
13,728,346 | 8,460,944 | ||||||||||||||
NET SALES |
285,742,868 | 100 | 321,767,083 | 100 | ||||||||||||
COST OF SALES (Notes 3, 9, 18 and 24) |
159,106,619 | 56 | 183,589,540 | 57 | ||||||||||||
GROSS PROFIT |
126,636,249 | 44 | 138,177,543 | 43 | ||||||||||||
REALIZED (UNREALIZED) GROSS PROFIT FROM
AFFILIATES (Note 2) |
(160,279 | ) | | 72 | | |||||||||||
REALIZED GROSS PROFIT |
126,475,970 | 44 | 138,177,615 | 43 | ||||||||||||
OPERATING EXPENSES (Notes 18 and 24) |
||||||||||||||||
Research and development |
19,688,032 | 7 | 19,737,038 | 6 | ||||||||||||
General and administrative |
10,238,131 | 3 | 9,895,617 | 3 | ||||||||||||
Marketing |
2,027,454 | 1 | 2,254,728 | 1 | ||||||||||||
Total operating expenses |
31,953,617 | 11 | 31,887,383 | 10 | ||||||||||||
INCOME FROM OPERATIONS |
94,522,353 | 33 | 106,290,232 | 33 | ||||||||||||
NON-OPERATING INCOME AND GAINS |
||||||||||||||||
Settlement income (Note 27) |
1,464,915 | 1 | 951,180 | | ||||||||||||
Interest income (Note 2) |
1,117,374 | | 2,728,892 | 1 | ||||||||||||
Valuation gain on financial instruments, net
(Notes 2, 5 and 23) |
587,151 | | | | ||||||||||||
Technical service income (Notes 24 and 27) |
375,118 | | 619,237 | | ||||||||||||
Gain on settlement and disposal of
financial assets, net (Notes 2 and 23) |
53,364 | | 452,159 | | ||||||||||||
Foreign exchange gain, net (Note 2) |
| | 1,113,406 | 1 | ||||||||||||
Equity in earnings of equity method
investees, net (Notes 2 and 10) |
| | 72,568 | | ||||||||||||
Others (Notes 2 and 24) |
523,587 | | 788,183 | | ||||||||||||
Total non-operating income and gains |
4,121,509 | 1 | 6,725,625 | 2 | ||||||||||||
-4-
2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
NON-OPERATING EXPENSES AND LOSSES |
||||||||||||||||
Equity in losses of equity method investees,
net (Notes 2 and 10) |
$ | 2,695,720 | 1 | $ | | | ||||||||||
Foreign exchange loss, net (Note 2) |
630,455 | | | | ||||||||||||
Interest expense |
142,026 | | 355,056 | | ||||||||||||
Valuation loss on financial instruments, net
(Notes 2, 5 and 23) |
| | 1,230,966 | 1 | ||||||||||||
Impairment of financial assets (Notes 2 and 11) |
| | 247,488 | | ||||||||||||
Loss on idle assets (Note 2) |
| | 210,477 | | ||||||||||||
Others (Note 2) |
194,639 | | 213,052 | | ||||||||||||
Total non-operating expenses and losses |
3,662,840 | 1 | 2,257,039 | 1 | ||||||||||||
INCOME BEFORE INCOME TAX |
94,981,022 | 33 | 110,758,818 | 34 | ||||||||||||
INCOME TAX EXPENSE (Notes 2 and 17) |
5,763,186 | 2 | 10,825,650 | 3 | ||||||||||||
NET INCOME |
$ | 89,217,836 | 31 | $ | 99,933,168 | 31 | ||||||||||
2009 | 2008 | |||||||||||||||
Before | After | Before | After | |||||||||||||
Income | Income | Income | Income | |||||||||||||
Tax | Tax | Tax | Tax | |||||||||||||
EARNINGS PER SHARE (NT$, Note 22) |
||||||||||||||||
Basic earnings per share |
$ | 3.68 | $ | 3.45 | $ | 4.25 | $ | 3.84 | ||||||||
Diluted earnings per share |
$ | 3.67 | $ | 3.44 | $ | 4.22 | $ | 3.81 | ||||||||
2008 | ||||
NET INCOME |
$ | 100,035,447 | ||
EARNINGS PER SHARE (NT$) |
||||
Basic earnings per share |
$ | 3.84 | ||
Diluted earnings per share |
$ | 3.81 | ||
(With Deloitte & Touche audit report dated January 22, 2010) | (Concluded) |
-5-
Others | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized Gain | ||||||||||||||||||||||||||||||||||||||||||||
Capital Stock Common Stock | Retained Earnings | Cumulative | (Loss) on | Total | ||||||||||||||||||||||||||||||||||||||||
Shares (In | Legal Capital | Special Capital | Unappropriated | Translation | Financial | Shareholders | ||||||||||||||||||||||||||||||||||||||
Thousands) | Amount | Capital Surplus | Reserve | Reserve | Earnings | Total | Adjustments | Instruments | Treasury Stock | Equity | ||||||||||||||||||||||||||||||||||
BALANCE, JANUARY 1, 2008 |
26,427,104 | $ | 264,271,037 | $ | 53,732,682 | $ | 56,406,684 | $ | 629,550 | $ | 161,828,337 | $ | 218,864,571 | $ | (1,072,853 | ) | $ | 680,997 | $ | (49,385,032 | ) | $ | 487,091,402 | |||||||||||||||||||||
Appropriations of prior years earnings |
||||||||||||||||||||||||||||||||||||||||||||
Legal capital reserve |
| | | 10,917,709 | | (10,917,709 | ) | | | | | | ||||||||||||||||||||||||||||||||
Reversal of special capital reserve |
| | | | (237,693 | ) | 237,693 | | | | | | ||||||||||||||||||||||||||||||||
Profit sharing to employees in cash |
| | | | | (3,939,883 | ) | (3,939,883 | ) | | | | (3,939,883 | ) | ||||||||||||||||||||||||||||||
Profit sharing to employees in stock |
393,988 | 3,939,883 | | | | (3,939,883 | ) | (3,939,883 | ) | | | | | |||||||||||||||||||||||||||||||
Cash dividends to shareholders NT$3.00 per share |
| | | | | (76,881,311 | ) | (76,881,311 | ) | | | | (76,881,311 | ) | ||||||||||||||||||||||||||||||
Stock dividends to shareholders NT$0.02 per share |
51,254 | 512,542 | | | | (512,542 | ) | (512,542 | ) | | | | | |||||||||||||||||||||||||||||||
Bonus to directors |
| | | | | (176,890 | ) | (176,890 | ) | | | | (176,890 | ) | ||||||||||||||||||||||||||||||
Capital surplus transferred to capital stock |
76,881 | 768,813 | (768,813 | ) | | | | | | | | | ||||||||||||||||||||||||||||||||
Net income in 2008 |
| | | | | 99,933,168 | 99,933,168 | | | | 99,933,168 | |||||||||||||||||||||||||||||||||
Adjustment arising from changes in percentage of
ownership in equity method investees |
| | (137,063 | ) | | | | | | | | (137,063 | ) | |||||||||||||||||||||||||||||||
Translation adjustments |
| | | | | | | 1,554,011 | | | 1,554,011 | |||||||||||||||||||||||||||||||||
Issuance of stock from exercising stock options |
6,027 | 60,266 | 166,884 | | | | | | | | 227,150 | |||||||||||||||||||||||||||||||||
Cash dividends received by subsidiaries from the Company |
| | 102,279 | | | | | | | | 102,279 | |||||||||||||||||||||||||||||||||
Valuation loss on available-for-sale financial assets |
| | | | | | | | (233,915 | ) | | (233,915 | ) | |||||||||||||||||||||||||||||||
Net change in unrealized gain (loss) on financial
instruments from equity method investees |
| | | | | | | | (734,424 | ) | | (734,424 | ) | |||||||||||||||||||||||||||||||
Treasury stock repurchased |
| | | | | | | | | (30,427,413 | ) | (30,427,413 | ) | |||||||||||||||||||||||||||||||
Treasury stock retired
|
(1,329,817 | ) | (13,298,168 | ) | (3,220,714 | ) | | | (63,293,563 | ) | (63,293,563 | ) | | | 79,812,445 | | ||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2008 |
25,625,437 | 256,254,373 | 49,875,255 | 67,324,393 | 391,857 | 102,337,417 | 170,053,667 | 481,158 | (287,342 | ) | | 476,377,111 | ||||||||||||||||||||||||||||||||
Appropriations of prior years earnings |
||||||||||||||||||||||||||||||||||||||||||||
Legal capital reserve |
| | | 9,993,317 | | (9,993,317 | ) | | | | | | ||||||||||||||||||||||||||||||||
Reversal of special capital reserve |
| | | | (391,857 | ) | 391,857 | | | | | | ||||||||||||||||||||||||||||||||
Cash dividends to shareholders NT$3.00 per share |
| | | | | (76,876,312 | ) | (76,876,312 | ) | | | | (76,876,312 | ) | ||||||||||||||||||||||||||||||
Stock dividends to shareholders NT$0.02 per share |
51,251 | 512,509 | | | | (512,509 | ) | (512,509 | ) | | | | | |||||||||||||||||||||||||||||||
Profit sharing to employees in stock |
141,870 | 1,418,699 | 6,076,289 | | | | | | | | 7,494,988 | |||||||||||||||||||||||||||||||||
Capital surplus transferred to capital stock |
76,876 | 768,763 | (768,763 | ) | | | | | | | | | ||||||||||||||||||||||||||||||||
Net income in 2009 |
| | | | | 89,217,836 | 89,217,836 | | | | 89,217,836 | |||||||||||||||||||||||||||||||||
Adjustment arising from changes in percentage of
ownership in equity method investees |
| | 115,418 | | | | | | | | 115,418 | |||||||||||||||||||||||||||||||||
Translation adjustments |
| | | | | | | (2,247,825 | ) | | | (2,247,825 | ) | |||||||||||||||||||||||||||||||
Issuance of stock from exercising stock options |
7,272 | 72,722 | 187,811 | | | | | | | | 260,533 | |||||||||||||||||||||||||||||||||
Valuation gain on available-for-sale financial assets |
| | | | | | | | 14,014 | | 14,014 | |||||||||||||||||||||||||||||||||
Net change in unrealized gain (loss) on financial
instruments from equity method investees |
| | | | | | | | 726,949 | | 726,949 | |||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2009 |
25,902,706 | $ | 259,027,066 | $ | 55,486,010 | $ | 77,317,710 | $ | | $ | 104,564,972 | $ | 181,882,682 | $ | (1,766,667 | ) | $ | 453,621 | $ | | $ | 495,082,712 | ||||||||||||||||||||||
Note: | Profit sharing to employees and bonus to directors in the amount of NT$6,771,338 thousand and NT$15,148,057 thousand, respectively, had been charged against earnings of 2009 and 2008. |
-6-
2009 | 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net income |
$ | 89,217,836 | $ | 99,933,168 | ||||
Adjustments to reconcile net income to net cash provided by operating
activities: |
||||||||
Depreciation and amortization |
74,327,868 | 74,569,562 | ||||||
Unrealized (realized) gross profit from affiliates |
160,279 | (72 | ) | |||||
Amortization of premium/discount of financial assets |
6,322 | (97,381 | ) | |||||
Impairment of financial assets |
| 247,488 | ||||||
Gain on disposal of available-for-sale financial assets, net |
(37,370 | ) | (443,404 | ) | ||||
Gain on held-to-maturity financial assets redeemed by the issuer |
(16,091 | ) | | |||||
Loss (gain) on disposal of financial assets carried at cost, net |
97 | (8,755 | ) | |||||
Equity in losses (earnings) of equity method investees, net |
2,695,720 | (72,568 | ) | |||||
Dividends received from equity method investees |
1,402,592 | 1,804,351 | ||||||
Gain on disposal of property, plant and equipment and other
assets, net |
(138,613 | ) | (298,769 | ) | ||||
Loss on idle assets |
| 210,477 | ||||||
Deferred income tax |
(1,678,381 | ) | 2,361,261 | |||||
Changes in operating assets and liabilities: |
||||||||
Decrease (increase) in: |
||||||||
Financial assets and liabilities at fair value through
profit or loss |
(222,901 | ) | (164,405 | ) | ||||
Receivables from related parties |
(10,813,569 | ) | 14,973,444 | |||||
Notes and accounts receivable |
(8,443,344 | ) | 6,470,152 | |||||
Allowance for doubtful receivables |
(5,746 | ) | (252,226 | ) | ||||
Allowance for sales returns and others |
2,715,050 | 2,011,897 | ||||||
Other receivables from related parties |
235,470 | 43,835 | ||||||
Other financial assets |
(392,317 | ) | (380,057 | ) | ||||
Inventories |
(6,022,280 | ) | 8,179,206 | |||||
Prepaid expenses and other current assets |
290,470 | (330,664 | ) | |||||
Increase (decrease) in: |
||||||||
Accounts payable |
4,925,758 | (5,171,553 | ) | |||||
Payables to related parties |
836,992 | (1,797,280 | ) | |||||
Income tax payable |
(461,691 | ) | (1,766,153 | ) | ||||
Salary and bonus payable |
7,075,402 | (30,280 | ) | |||||
Accrued profit sharing to employees and bonus to directors |
(881,731 | ) | 15,148,057 | |||||
Accrued expenses and other current liabilities |
1,259,544 | (3,112,220 | ) | |||||
Accrued pension cost |
97,167 | 52,330 | ||||||
Deferred credits |
(230,487 | ) | (129,494 | ) | ||||
Net cash provided by operating activities |
155,902,046 | 211,949,947 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Acquisitions of: |
||||||||
Property, plant and equipment |
(86,970,843 | ) | (56,766,192 | ) | ||||
Available-for-sale financial assets |
| (23,697,000 | ) | |||||
Held-to-maturity financial assets |
(10,803,805 | ) | (12,371,965 | ) |
-7-
2009 | 2008 | |||||||
Investments accounted for using equity method |
$ | (320,443 | ) | $ | (494,765 | ) | ||
Financial assets carried at cost |
(1,411 | ) | (20,681 | ) | ||||
Proceeds from disposal or redemption of: |
||||||||
Available-for-sale financial assets |
1,037,370 | 45,584,934 | ||||||
Held-to-maturity financial assets |
6,293,000 | 15,004,000 | ||||||
Financial assets carried at cost |
18,828 | 10,606 | ||||||
Property, plant and equipment and other assets |
71,850 | 2,042,899 | ||||||
Proceeds from return of capital by investees |
27,753 | 2,465,293 | ||||||
Cash from merger of subsidiaries |
| 270,650 | ||||||
Increase in deferred charges |
(1,347,228 | ) | (3,199,813 | ) | ||||
Decrease in refundable deposits |
21,621 | 21,801 | ||||||
Net cash used in investing activities |
(91,973,308 | ) | (31,150,233 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Repayment of bonds payable |
(8,000,000 | ) | | |||||
Decrease in guarantee deposits |
(477,776 | ) | (761,525 | ) | ||||
Proceeds from exercise of employee stock options |
260,533 | 227,150 | ||||||
Cash dividends |
(76,876,312 | ) | (76,881,311 | ) | ||||
Profit sharing to employees in cash |
| (3,939,883 | ) | |||||
Bonus to directors |
| (176,890 | ) | |||||
Repurchase of treasury stock |
| (33,480,997 | ) | |||||
Net cash used in financing activities |
(85,093,555 | ) | (115,013,456 | ) | ||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
(21,164,817 | ) | 65,786,258 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |
138,208,360 | 72,422,102 | ||||||
CASH AND CASH EQUIVALENTS, END OF YEAR |
$ | 117,043,543 | $ | 138,208,360 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||
Interest paid |
$ | 351,803 | $ | 355,056 | ||||
Income tax paid |
$ | 7,791,196 | $ | 10,282,464 | ||||
INVESTING AND FINANCING ACTIVITIES AFFECTING BOTH CASH AND
NON-CASH ITEMS |
||||||||
Acquisition of property, plant, and equipment |
$ | 108,592,471 | $ | 58,951,343 | ||||
Increase in payables to contractors and equipment suppliers |
(21,620,819 | ) | (2,185,151 | ) | ||||
Nonmonetary exchange trade-out price |
(809 | ) | | |||||
Cash paid |
$ | 86,970,843 | $ | 56,766,192 | ||||
-8-
2009 | 2008 | |||||||
Disposal of property, plant and equipment and other assets |
$ | 64,390 | $ | 2,051,168 | ||||
Decrease (increase) in other receivables from related parties |
8,269 | (8,269 | ) | |||||
Nonmonetary exchange trade-out price |
(809 | ) | | |||||
Cash received |
$ | 71,850 | $ | 2,042,899 | ||||
Repurchase of treasury stock |
$ | | $ | 30,427,413 | ||||
Decrease in accrued expenses and other current liabilities |
| 3,053,584 | ||||||
Cash paid |
$ | | $ | 33,480,997 | ||||
NON-CASH FINANCING ACTIVITIES |
||||||||
Current portion of bonds payable |
$ | | $ | 8,000,000 | ||||
Current portion of other long-term payable (under accrued
expenses and other current liabilities) |
$ | 769,144 | $ | 1,026,421 | ||||
-9-
1. | GENERAL | |
Taiwan Semiconductor Manufacturing Company Limited (the Company or TSMC), a Republic of China (R.O.C.) corporation, was incorporated on February 21, 1987. The Company is a dedicated foundry in the semiconductor industry which engages mainly in the manufacturing, selling, packaging, testing and computer-aided designing of integrated circuits and other semiconductor devices and the manufacturing of masks. On September 5, 1994, its shares were listed on the Taiwan Stock Exchange (TSE). On October 8, 1997, TSMC listed some of its shares of stock on the New York Stock Exchange (NYSE) in the form of American Depositary Shares (ADSs). | ||
As of December 31, 2009 and 2008, the Company had 22,292 and 20,425 employees, respectively. | ||
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
The financial statements are presented in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, Business Accounting Law, Guidelines Governing Business Accounting, and accounting principles generally accepted in the R.O.C. | ||
For the convenience of readers, the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the R.O.C. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language financial statements shall prevail. | ||
Significant accounting policies are summarized as follows: | ||
Use of Estimates | ||
The preparation of financial statements in conformity with the aforementioned guidelines, law and principles requires management to make reasonable assumptions and estimates of matters that are inherently uncertain. The actual results may differ from managements estimates. | ||
Classification of Current and Noncurrent Assets and Liabilities | ||
Current assets are assets held for trading purposes and assets expected to be converted to cash, sold or consumed within one year from the balance sheet date. Current liabilities are obligations incurred for trading purposes and obligations expected to be settled within one year from the balance sheet date. Assets and liabilities that are not classified as current are noncurrent assets and liabilities, respectively. | ||
Cash Equivalents | ||
Repurchase agreements collateralized by government bonds acquired with maturities of less than three months from the date of purchase are classified as cash equivalents. The carrying amount approximates fair value. |
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Financial Assets/Liabilities at Fair Value Through Profit or Loss | ||
Derivatives that do not meet the criteria for hedge accounting are initially recognized at fair value, with transaction costs expensed as incurred. The derivatives are remeasured at fair value subsequently with changes in fair value recognized in earnings. A regular way purchase or sale of financial assets is accounted for using settlement date accounting. | ||
Fair value is estimated using valuation techniques incorporating estimates and assumptions that are consistent with prevailing market conditions. When the fair value is positive, the derivative is recognized as a financial asset; when the fair value is negative, the derivative is recognized as a financial liability. | ||
Available-for-sale Financial Assets | ||
Available-for-sale financial assets are initially recognized at fair value plus transaction costs that are directly attributable to the acquisition. Changes in fair value from subsequent remeasurement are reported as a separate component of shareholders equity. The corresponding accumulated gains or losses are recognized in earnings when the financial asset is derecognized from the balance sheet. A regular way purchase or sale of financial assets is accounted for using settlement date accounting. | ||
The fair value of debt securities is determined using the average of bid and asked prices at the end of the year. | ||
Any difference between the initial carrying amount of a debt security and the amount due at maturity is amortized using the effective interest method, with the amortization recognized in earnings. | ||
If there is objective evidence which indicates that a financial asset is impaired, a loss is recognized. If, in a subsequent period, the amount of the impairment loss decreases, for equity securities, the previously recognized impairment loss is reversed to the extent of the decrease and recorded as an adjustment to shareholders equity; for debt securities, the amount of the decrease is recognized in earnings, provided that the decrease is clearly attributable to an event which occurred after the impairment loss was recognized. | ||
Held-to-maturity Financial Assets | ||
Debt securities for which the Company has a positive intention and ability to hold to maturity are categorized as held-to-maturity financial assets and are carried at amortized cost. Those financial assets are initially recognized at fair value plus transaction costs that are directly attributable to the acquisition. Gains or losses are recognized at the time of derecognition, impairment or amortization. A regular way purchase or sale of financial assets is accounted for using settlement date accounting. | ||
If there is objective evidence which indicates that a financial asset is impaired, a loss is recognized. If, in a subsequent period, the amount of the impairment loss decreases and the decrease is clearly attributable to an event which occurred after the impairment loss was recognized, the previously recognized impairment loss is reversed to the extent of the decrease. The reversal may not result in a carrying amount that exceeds the amortized cost that would have been determined as if no impairment loss had been recognized. | ||
Allowance for Doubtful Receivables | ||
An allowance for doubtful receivables is provided based on a review of the collectability of receivables. The Company determines the amount of the allowance for doubtful receivables with a charge of 1% of the amount of outstanding receivables considering the account aging analysis and current trends in the credit quality of its customers. |
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Revenue Recognition and Allowance for Sales Returns and Others | ||
The Company recognizes revenue when evidence of an arrangement exists, the rewards of ownership and significant risk of the goods has been transferred to the buyer, price is fixed or determinable, and collectability is reasonably assured. Provisions for estimated sales returns and others are recorded in the year the related revenue is recognized, based on historical experience, managements judgment, and any known factors that would significantly affect the allowance. | ||
Sales prices are determined using fair value taking into account related sales discounts agreed to by the Company and its customers. Sales agreements typically provide that payment is due 30 days from invoice date for a majority of the customers and 30 to 45 days after the end of the month in which sales occur for some customers. Since the receivables from sales are collectible within one year and such transactions are frequent, fair value of the receivables is equivalent to the nominal amount of the cash to be received. | ||
Inventories | ||
Inventories are recorded at standard cost and adjusted to approximate weighted-average cost on the balance sheet date. | ||
Prior to January 1, 2009, inventories were stated at the lower of cost or market value. Any write-down was made on a total-inventory basis. Market value represented replacement cost for raw materials, supplies and spare parts and net realizable value for work in process and finished goods. | ||
As stated in Note 3, effective January 1, 2009, inventories are stated at the lower of cost or net realizable value. Inventory write-downs are made on an item-by-item basis, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and necessary selling costs. | ||
Investments Accounted for Using Equity Method | ||
Investments in companies wherein the Company exercises significant influence over the operating and financial policy decisions are accounted for using the equity method. The Companys share of the net income or net loss of an investee is recognized in the equity in earnings/losses of equity method investees, net account. The cost of an investment shall be analyzed and the cost of investment in excess of the fair value of identifiable net assets acquired, representing goodwill, shall not be amortized. If the fair value of identifiable net assets acquired exceeds the cost of investment, the excess shall be proportionately allocated as reductions to fair values of non-current assets (except for financial assets other than investments accounted for using the equity method and deferred income tax assets). When an indication of impairment is identified, the carrying amount of the investment is reduced, with the related impairment loss recognized in earnings. | ||
When the Company subscribes for additional investees shares at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment in the investee differs from the amount of the Companys share of the investees equity. The Company records such a difference as an adjustment to long-term investments with the corresponding amount charged or credited to capital surplus. | ||
Gains or losses on sales from the Company to equity method investees are deferred in proportion to the Companys ownership percentages in the investees until such gains or losses are realized through transactions with third parties. The entire amount of the gains or losses on sales to investees over which the Company has a controlling interest is deferred until such gains or losses are realized through subsequent sales of the related products to third parties. Gains or losses on sales from equity method investees to the Company are deferred in proportion to the Companys ownership percentages in the investees until they are realized through transactions with third parties. Gains or losses on sales between equity method investees over each of which the Company has control are deferred in proportion to the Companys weighted-average ownership percentage in the investee which records gains or losses. In transactions between equity method investees over either or both of which the Company has no control, gains or losses on sales are |
-12-
deferred in proportion to the multiplication of the Companys weighted-average ownership percentages in the investees. Such gains or losses are recorded until they are realized through transactions with third parties. | ||
If an investees functional currency is a foreign currency, differences will result from the translation of the investees financial statements into the reporting currency of the Company. Such differences are charged or credited to cumulative translation adjustments, a separate component of shareholders equity. | ||
Financial Assets Carried at Cost | ||
Investments for which the Company does not exercise significant influence and that do not have a quoted market price in an active market and whose fair value cannot be reliably measured, such as non-publicly traded stocks and mutual funds, are carried at their original cost. The costs of non-publicly traded stocks and mutual funds are determined using the weighted-average method. If there is objective evidence which indicates that a financial asset is impaired, a loss is recognized. A subsequent reversal of such impairment loss is not allowed. | ||
Cash dividends are recognized as investment income upon resolution of shareholders of an investee but are accounted for as a reduction to the original cost of investment if such dividends are declared on the earnings of the investee attributable to the period prior to the purchase of the investment. Stock dividends are recorded as an increase in the number of shares held and do not affect investment income. The cost per share is recalculated based on the new total number of shares. | ||
Property, Plant and Equipment, Assets Leased to Others and Idle Assets | ||
Property, plant and equipment and assets leased to others are stated at cost less accumulated depreciation. When an indication of impairment is identified, any excess of the carrying amount of an asset over its recoverable amount is recognized as a loss. If the recoverable amount increases in a subsequent period, the amount previously recognized as impairment would be reversed and recognized as a gain. However, the adjusted amount may not exceed the carrying amount that would have been determined, net of depreciation, as if no impairment loss had been recognized. Significant additions, renewals and betterments incurred during the construction period are capitalized. Maintenance and repairs are expensed as incurred. | ||
Depreciation is computed using the straight-line method over the following estimated service lives: buildings 10 to 20 years; machinery and equipment 5 years; and office equipment 3 to 5 years. | ||
Upon sale or disposal of property, plant and equipment and assets leased to others, the related cost and accumulated depreciation are deducted from the corresponding accounts, with any gain or loss recorded as non-operating gains or losses in the year of sale or disposal. | ||
When property, plant and equipment are determined to be idle or useless, they are transferred to idle assets at the lower of the net realizable value or carrying amount. Depreciation on the idle assets is provided continuously, and the idle assets are tested for impairment on a periodical basis. | ||
Intangible Assets | ||
Goodwill represents the excess of the consideration paid for acquisition over the fair value of identifiable net assets acquired. Goodwill is no longer amortized and instead is tested for impairment annually. If an event occurs or circumstances change which indicate that the fair value of goodwill is more likely than not below its carrying amount, an impairment loss is recognized. A subsequent reversal of such impairment loss is not allowed. |
-13-
Deferred charges consist of technology license fees, software and system design costs and other charges. The amounts are amortized over the following periods: Technology license fees the shorter of the estimated life of the technology or the term of the technology transfer contract; software and system design costs and other charges 3 years. When an indication of impairment is identified, any excess of the carrying amount of an asset over its recoverable amount is recognized as a loss. If the recoverable amount increases in a subsequent period, the previously recognized impairment loss would be reversed and recognized as a gain. However, the adjusted amount may not exceed the carrying amount that would have been determined, net of amortization, as if no impairment loss had been recognized. | ||
Expenditures related to research activities and those related to development activities that do not meet the criteria for capitalization are charged to expenses when incurred. | ||
Pension Costs | ||
For employees who participate in defined contribution pension plans, pension costs are recorded based on the actual contributions made to employees individual pension accounts during their service periods. For employees who participate in defined benefit pension plans, pension costs are recorded based on actuarial calculations. | ||
Income Tax | ||
The Company applies an inter-period allocation for its income tax whereby deferred income tax assets and liabilities are recognized for the tax effects of temporary differences and unused tax credits. Valuation allowances are provided to the extent, if any, that it is more likely than not that deferred income tax assets will not be realized. A deferred tax asset or liability is classified as current or noncurrent in accordance with the classification of its related asset or liability. However, if a deferred tax asset or liability does not relate to an asset or liability in the financial statements, then it is classified as either current or noncurrent based on the expected length of time before it is realized or settled. | ||
Any tax credits arising from purchases of machinery, equipment and technology, research and development expenditures, personnel training expenditures, and investments in important technology-based enterprises are recognized using the flow-through method. | ||
Adjustments of prior years tax liabilities are added to or deducted from the current years tax provision. | ||
Income tax on unappropriated earnings at a rate of 10% is expensed in the year of shareholder approval which is the year subsequent to the year the earnings are generated. | ||
Stock-based Compensation | ||
Employee stock options that were granted or modified in the period from January 1, 2004 to December 31, 2007 are accounted for by the interpretations issued by the Accounting Research and Development Foundation of the Republic of China. The Company adopted the intrinsic value method and any compensation cost determined using this method is recognized in earnings over the employee vesting period. Employee stock option plans that were granted or modified after December 31, 2007 are accounted for using fair value method in accordance with Statement of Financial Accounting Standards No. 39, Accounting for Share-based Payment. The Company did not grant or modify any employee stock options since January 1, 2008. | ||
Profit Sharing to Employees and Bonus to Directors | ||
Effective January 1, 2008, the Company adopted Interpretation 2007-052, Accounting for Bonuses to Employees, Directors and Supervisors, which requires companies to record profit sharing to employees and bonus to directors as an expense rather than as an appropriation of earnings. |
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Treasury Stock | ||
Treasury stock is stated at cost and shown as a deduction in shareholders equity. When the Company retires treasury stock, the treasury stock account is reduced and the common stock as well as the capital surplus additional paid-in capital are reversed on a pro rata basis. When the book value of the treasury stock exceeds the sum of the par value and additional paid-in capital, the difference is charged to capital surplus treasury stock transactions and to retained earnings for any remaining amount. | ||
The Companys stock held by its subsidiaries is treated as treasury stock and reclassified from investments accounted for using equity method to treasury stock. The gains resulted from disposal of the treasury stock held by subsidiaries and cash dividends received by subsidiaries from the Company are recorded under capital surplus treasury stock transactions. | ||
Foreign-currency Transactions | ||
Foreign-currency transactions other than derivative contracts are recorded in New Taiwan dollars at the rates of exchange in effect when the transactions occur. Exchange gains or losses derived from foreign-currency transactions or monetary assets and liabilities denominated in foreign currencies are recognized in earnings. | ||
At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are revalued at prevailing exchange rates with the resulting gains or losses recognized in earnings. | ||
3. | ACCOUNTING CHANGES | |
Effective January 1, 2009, the Company adopted the newly revised Statement of Financial Accounting Standards (SFAS) No. 10, Accounting for Inventories. The main revisions are (1) inventories are stated at the lower of cost or net realizable value, and inventories are written down to net realizable value on an item-by-item basis except when the grouping of similar or related items is appropriate; (2) unallocated overheads are recognized as expenses in the year in which they are incurred; and (3) abnormal cost, write-downs of inventories and any reversal of write-downs are recorded as cost of sales for the year. Such changes in accounting principle did not have significant effect on the Companys financial statements for the year ended December 31, 2009. | ||
Effective January 1, 2008, the Company adopted Interpretation 2007-052, Accounting for Bonuses to Employees, Directors and Supervisors, issued in March 2007 by the ARDF, which requires companies to record profit sharing to employees and bonus to directors and supervisors as an expense rather than as an appropriation of earnings. The adoption of this interpretation resulted in a decrease in net income and earnings per share (after income tax and retroactively adjusted for the issuance of stock dividend) of NT$12,627,332 thousand and NT$0.48, respectively, for the year ended December 31, 2008. | ||
Effective January 1, 2008, the Company adopted SFAS No. 39, Accounting for Share-based Payment, which requires companies to record share-based payment transactions in the financial statements at fair value. Such a change in accounting principle did not have any effect on the Companys financial statements as of and for the year ended December 31, 2008. |
-15-
4. | CASH AND CASH EQUIVALENTS |
December 31 | ||||||||
2009 | 2008 | |||||||
Cash and deposits in banks |
$ | 114,023,307 | $ | 129,538,047 | ||||
Repurchase agreements collateralized by government bonds |
3,020,236 | 8,670,313 | ||||||
$ | 117,043,543 | $ | 138,208,360 | |||||
5. | FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS |
December 31 | ||||||||
2009 | 2008 | |||||||
Trading financial assets |
||||||||
Forward exchange contracts |
$ | | $ | 28,411 | ||||
Cross currency swap contracts |
181,743 | 14,049 | ||||||
$ | 181,743 | $ | 42,460 | |||||
Trading financial liabilities |
||||||||
Forward exchange contracts |
$ | | $ | 34,243 | ||||
Cross currency swap contracts |
| 49,375 | ||||||
$ | | $ | 83,618 | |||||
The Company entered into derivative contracts during the years ended December 31, 2009 and 2008 to manage exposures due to fluctuations of foreign exchange rates. The derivative contracts entered into by the Company did not meet the criteria for hedge accounting. Therefore, the Company did not apply hedge accounting treatment for its derivative contracts. | ||
Outstanding forward exchange contracts consisted of the following: |
Contract Amount | ||||
Maturity Date | (In Thousands) | |||
December 31, 2008 |
||||
Sell US$/Buy NT$
|
January 2009 to February 2009 | US$135,000/NT$4,430,925 | ||
Sell EUR/Buy NT$
|
January 2009 | EUR1,500/NT$63,150 |
Outstanding cross currency swap contracts consisted of the following: |
Range of | ||||||||||||
Contract Amount | Range of | Interest Rates | ||||||||||
Maturity Date | (In Thousands) | Interest Rates Paid | Received | |||||||||
December 31, 2009 |
||||||||||||
January 2010 to February 2010 |
US$ | 750,000/NT$24,201,706 | 0.24%-0.70% | 0.00%-0.38% |
-16-
Range of | Range of | |||||||||||
Contract Amount | Interest Rates | Interest Rates | ||||||||||
Maturity Date | (In Thousands) | Paid | Received | |||||||||
December 31, 2008 |
||||||||||||
January 2009 |
US$ | 307,000/NT$10,061,232 | 0.54%-5.00% | 0.00%-3.83% |
For the years ended December 31, 2009 and 2008, changes in fair value related to derivative financial instruments recognized in earnings was a net gain of NT$587,151 thousand and a net loss of NT$1,230,966 thousand, respectively. | ||
6. | AVAILABLE-FOR-SALE FINANCIAL ASSETS |
December 31 | ||||||||
2009 | 2008 | |||||||
Corporate bonds |
$ | 1,046,672 | $ | 2,032,658 | ||||
7. | HELD-TO-MATURITY FINANCIAL ASSETS |
December 31 | ||||||||
2009 | 2008 | |||||||
Corporate bonds |
$ | 12,266,311 | $ | 16,136,752 | ||||
Structured time deposits |
7,000,000 | | ||||||
Government bonds |
2,897,587 | 1,506,572 | ||||||
22,163,898 | 17,643,324 | |||||||
Current portion |
(9,944,843 | ) | (5,881,999 | ) | ||||
$ | 12,219,055 | $ | 11,761,325 | |||||
Structured time deposits categorized as held-to-maturity financial assets consisted of the following: |
Principal | Interest | Range of | ||||||||||||||
Amount | Receivable | Interest Rates | Maturity Date | |||||||||||||
December 31, 2009 |
||||||||||||||||
Callable domestic deposits |
$ | 7,000,000 | $ | 4,308 | 0.36%-0.95 | % | July 2010 to August 2011 | |||||||||
8. | ALLOWANCES FOR DOUBTFUL RECEIVABLES, SALES RETURNS AND OTHERS | |
Movements of the allowance for doubtful receivables were as follows: |
Years Ended December 31 | ||||||||
2009 | 2008 | |||||||
Balance, beginning of year |
$ | 436,746 | $ | 688,972 | ||||
Provision |
238,061 | | ||||||
Write-off |
(243,807 | ) | (252,226 | ) | ||||
Balance, end of year |
$ | 431,000 | $ | 436,746 | ||||
-17-
Movements of the allowance for sales returns and others were as follows: |
Years Ended December 31 | ||||||||
2009 | 2008 | |||||||
Balance, beginning of year |
$ | 5,868,582 | $ | 3,856,685 | ||||
Provision |
13,728,346 | 8,460,944 | ||||||
Write-off |
(11,013,296 | ) | (6,449,047 | ) | ||||
Balance, end of year |
$ | 8,583,632 | $ | 5,868,582 | ||||
9. | INVENTORIES |
December 31 | ||||||||
2009 | 2008 | |||||||
Finished goods |
$ | 2,355,232 | $ | 4,444,657 | ||||
Work in process |
14,230,318 | 7,117,049 | ||||||
Raw materials |
1,420,466 | 716,870 | ||||||
Supplies and spare parts |
824,200 | 529,360 | ||||||
$ | 18,830,216 | $ | 12,807,936 | |||||
Write-down of inventories to net realizable value in the amount of NT$199,732 thousand and NT$879,434 thousand, respectively, were included in the cost of sales for the years ended December 31, 2009 and 2008. | ||
10. | INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD |
December 31 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
% of | % of | |||||||||||||||
Carrying | Owner- | Carrying | Owner- | |||||||||||||
Amount | ship | Amount | ship | |||||||||||||
TSMC Global Ltd. (TSMC Global) |
$ | 45,397,256 | 100 | $ | 45,756,519 | 100 | ||||||||||
TSMC Partners, Ltd. (TSMC Partners) |
32,545,619 | 100 | 3,730,913 | 100 | ||||||||||||
Vanguard International Semiconductor
Corporation (VIS) |
9,365,232 | 37 | 9,787,275 | 37 | ||||||||||||
Systems on Silicon Manufacturing Company
Pte Ltd. (SSMC) |
6,157,141 | 39 | 6,808,192 | 39 | ||||||||||||
TSMC China Company Limited (TSMC China) |
2,961,043 | 100 | 6,267,128 | 100 | ||||||||||||
TSMC North America |
2,723,727 | 100 | 2,435,666 | 100 | ||||||||||||
Xintec Inc. (Xintec) |
1,475,014 | 41 | 1,506,384 | 42 | ||||||||||||
VentureTech Alliance Fund III, L.P. (VTAF
III) |
1,309,615 | 98 | 1,305,605 | 98 | ||||||||||||
VentureTech Alliance Fund II, L.P. (VTAF II) |
1,122,810 | 98 | 975,367 | 98 | ||||||||||||
Global UniChip Corporation (GUC) |
983,126 | 35 | 950,263 | 36 | ||||||||||||
Emerging Alliance Fund, L.P. (Emerging
Alliance) |
305,866 | 99 | 433,481 | 99 | ||||||||||||
Taiwan Semiconductor Manufacturing Company
Europe B.V. (TSMC Europe) |
159,467 | 100 | 124,594 | 100 |
-18-
December 31 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
% of | % of | |||||||||||||||
Carrying | Owner- | Carrying | Owner- | |||||||||||||
Amount | ship | Amount | ship | |||||||||||||
TSMC Japan Limited (TSMC Japan) |
$ | 135,663 | 100 | $ | 137,617 | 100 | ||||||||||
TSMC Korea Limited (TSMC Korea) |
18,519 | 100 | 15,117 | 100 | ||||||||||||
TSMC International Investment
Ltd. (TSMC International) |
| | 29,637,057 | 100 | ||||||||||||
$ | 104,660,098 | $ | 109,871,178 | |||||||||||||
The Company will subscribe through a private placement for new shares of Motech Industries Inc. (Motech) under a Share Subscription Agreement entered into on December 9, 2009. The total consideration is approximately NT$6.2 billion (US$193 million). After the subscription of shares, the Company will own 20% of the Motech shares. The transaction is still subject to Motechs shareholders approval and regulatory approval. | ||
TSMC Partners and TSMC International were both 100% owned subsidiaries of the Company. To simplify the organization structure of investment, TSMC Partners merged TSMC International in June 2009. | ||
Chi Cherng and Hsin Ruey, both 100% owned subsidiaries of the Company, were engaged in investing activities. To simplify the organization structure of investment, the Company merged Chi Cherng and Hsin Ruey into the Company in the third quarter of 2008. | ||
For the years ended December 31, 2009 and 2008, equity in earnings/losses of equity method investees was a net loss of NT$2,695,720 thousand and a net gain of NT$72,568 thousand, respectively. Related equity in earnings/losses of equity method investees were determined based on the audited financial statements, except those of TSMC Japan, TSMC Europe and TSMC Korea for the year ended December 31, 2009. The Company believes that, had TSMC Japan, TSMC Europe and TSMC Koreas financial statements been audited, any adjustments arising would have had no material effect on the Companys financial statements. | ||
As of December 31, 2009 and 2008, fair values of publicly traded stocks in investments accounted for using equity method (VIS and GUC) were NT$18,027,990 thousand and NT$9,889,107 thousand, respectively. | ||
Movements of the difference between the cost of investments and the Companys share in investees net assets allocated to depreciable assets were as follows: |
Years Ended December 31 | ||||||||
2009 | 2008 | |||||||
Balance, beginning of year |
2,053,253 | $ | 2,677,388 | |||||
Amortization |
(624,135 | ) | (624,135 | ) | ||||
Balance, end of year |
$ | 1,429,118 | $ | 2,053,253 | ||||
-19-
Movements of the aforementioned difference allocated to goodwill were as follows: |
Years Ended December 31 | ||||||||
2009 | 2008 | |||||||
Balance, beginning of year |
$ | 1,061,885 | $ | 987,349 | ||||
From merger of subsidiaries |
| 74,536 | ||||||
Balance, end of year |
$ | 1,061,885 | $ | 1,061,885 | ||||
11. | FINANCIAL ASSETS CARRIED AT COST |
December 31 | ||||||||
2009 | 2008 | |||||||
Non-publicly traded stocks |
$ | 338,584 | $ | 357,509 | ||||
Mutual funds |
163,404 | 161,993 | ||||||
$ | 501,988 | $ | 519,502 | |||||
For the year ended December 31 2008, the Company recognized impairment of financial assets carried at cost of NT$247,488 thousand. | ||
12. | PROPERTY, PLANT AND EQUIPMENT |
Year Ended December 31, 2009 | ||||||||||||||||||||
Balance, | ||||||||||||||||||||
Beginning of | Balance, | |||||||||||||||||||
Year | Additions | Disposals | Reclassification | End of Year | ||||||||||||||||
Cost |
||||||||||||||||||||
Buildings |
$ | 114,014,588 | $ | 10,520,371 | $ | (12,978 | ) | $ | 66 | $ | 124,522,047 | |||||||||
Machinery and equipment |
635,008,261 | 80,824,102 | (2,408,802 | ) | 2,565 | 713,426,126 | ||||||||||||||
Office equipment |
9,748,869 | 1,219,459 | (187,163 | ) | (66 | ) | 10,781,099 | |||||||||||||
758,771,718 | $ | 92,563,932 | $ | (2,608,943 | ) | $ | 2,565 | 848,729,272 | ||||||||||||
Accumulated depreciation |
||||||||||||||||||||
Buildings |
65,351,514 | $ | 8,186,551 | $ | (12,971 | ) | $ | 66 | 73,525,160 | |||||||||||
Machinery and equipment |
484,046,160 | 63,395,862 | (1,750,677 | ) | 2,565 | 545,693,910 | ||||||||||||||
Office equipment |
7,849,580 | 882,718 | (186,979 | ) | (66 | ) | 8,545,253 | |||||||||||||
557,247,254 | $ | 72,465,131 | $ | (1,950,627 | ) | $ | 2,565 | 627,764,323 | ||||||||||||
Advance payments and
construction in progress |
17,758,038 | $ | 16,028,539 | $ | | $ | | 33,786,577 | ||||||||||||
$ | 219,282,502 | $ | 254,751,526 | |||||||||||||||||
Year Ended December 31, 2008 | ||||||||||||||||||||
Balance, | ||||||||||||||||||||
Beginning of | Additions | Balance, | ||||||||||||||||||
Year | (Deductions) | Disposals | Reclassification | End of Year | ||||||||||||||||
Cost |
||||||||||||||||||||
Buildings |
$ | 101,907,892 | $ | 12,115,531 | $ | (8,524 | ) | $ | (311 | ) | $ | 114,014,588 | ||||||||
Machinery and equipment |
589,131,625 | 49,396,313 | (3,385,502 | ) | (134,175 | ) | 635,008,261 | |||||||||||||
Office equipment |
9,167,107 | 764,414 | (182,709 | ) | 57 | 9,748,869 | ||||||||||||||
700,206,624 | $ | 62,276,258 | $ | (3,576,735 | ) | $ | (134,429 | ) | 758,771,718 | |||||||||||
Accumulated depreciation |
||||||||||||||||||||
Buildings |
57,349,828 | $ | 8,010,214 | $ | (8,524 | ) | $ | (4 | ) | 65,351,514 | ||||||||||
Machinery and equipment |
422,278,071 | 63,145,978 | (1,258,542 | ) | (119,347 | ) | 484,046,160 | |||||||||||||
Office equipment |
7,097,120 | 935,140 | (182,706 | ) | 26 | 7,849,580 | ||||||||||||||
486,725,019 | $ | 72,091,332 | $ | (1,449,772 | ) | $ | (119,325 | ) | 557,247,254 | |||||||||||
Advance payments and
construction in progress |
21,082,953 | $ | (3,324,915 | ) | $ | | $ | | 17,758,038 | |||||||||||
$ | 234,564,558 | $ | 219,282,502 | |||||||||||||||||
No interest was capitalized during the years ended December 31, 2009 and 2008. |
-20-
13. | DEFERRED CHARGES, NET |
Year Ended December 31, 2009 | ||||||||||||||||||||||||
Balance, | ||||||||||||||||||||||||
Beginning of | Balance, | |||||||||||||||||||||||
Year | Additions | Amortization | Disposals | Reclassification | End of Year | |||||||||||||||||||
Technology license fees |
$ | 3,786,251 | $ | | $ | (806,450 | ) | $ | | $ | | $ | 2,979,801 | |||||||||||
Software and system
design costs |
1,559,857 | 861,783 | (774,667 | ) | | | 1,646,973 | |||||||||||||||||
Patent and others |
1,055,353 | 485,445 | (275,887 | ) | | | 1,264,911 | |||||||||||||||||
$ | 6,401,461 | $ | 1,347,228 | $ | (1,857,004 | ) | $ | | $ | | $ | 5,891,685 | ||||||||||||
Year Ended December 31, 2008 | ||||||||||||||||||||||||
Balance, | ||||||||||||||||||||||||
Beginning of | Balance, | |||||||||||||||||||||||
Year | Additions | Amortization | Disposals | Reclassification | End of Year | |||||||||||||||||||
Technology license fees |
$ | 5,349,937 | $ | | $ | (1,563,686 | ) | $ | | $ | | $ | 3,786,251 | |||||||||||
Software and system
design costs |
1,309,272 | 945,279 | (680,474 | ) | (14,279 | ) | 59 | 1,559,857 | ||||||||||||||||
Patent and others |
513,204 | 733,342 | (191,193 | ) | | | 1,055,353 | |||||||||||||||||
$ | 7,172,413 | $ | 1,678,621 | $ | (2,435,353 | ) | $ | (14,279 | ) | $ | 59 | $ | 6,401,461 | |||||||||||
14. | BONDS PAYABLE |
December 31 | ||||||||
2009 | 2008 | |||||||
Domestic unsecured bonds: |
||||||||
Issued in January 2002 and repayable in
January 2009 and 2012 in two installments,
2.75% and 3.00% interest payable annually,
respectively |
$ | 4,500,000 | $ | 12,500,000 | ||||
Current portion |
| (8,000,000 | ) | |||||
$ | 4,500,000 | $ | 4,500,000 | |||||
15. | OTHER LONG-TERM PAYABLES | |
The Companys long-term payables mainly resulted from license agreements for certain semiconductor-related patents. As of December 31, 2009, future payments for other long-term payables were as follows: |
Year of Payment | Amount | |||
2010 |
$ | 769,144 | ||
2011 |
416,390 | |||
1,185,534 | ||||
Current portion (classified under accrued expenses and other
current liabilities) |
(769,144 | ) | ||
$ | 416,390 | |||
-21-
16. | PENSION PLANS | |
The pension mechanism under the Labor Pension Act is deemed a defined contribution plan. Pursuant to the Act, the Company has made monthly contributions equal to 6% of each employees monthly salary to employees pension accounts and recognized pension costs of NT$608,731 thousand and NT$657,870 thousand for the years ended December 31, 2009 and 2008, respectively. | ||
The Company has a defined benefit plan under the Labor Standards Law that provides benefits based on an employees length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to a pension fund (the Fund), which is administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committees name in the Bank of Taiwan. | ||
Pension information on the defined benefit plan is summarized as follows: |
a. | Components of net periodic pension cost for the year |
|||||||||
2009 | 2008 | |||||||||
Service cost |
$ | 166,460 | $ | 151,603 | ||||||
Interest cost |
149,297 | 170,025 | ||||||||
Projected return on plan assets |
(56,170 | ) | (67,315 | ) | ||||||
Amortization |
29,134 | 3,776 | ||||||||
Net periodic pension cost |
$ | 288,721 | $ | 258,089 | ||||||
b. | Reconciliation of funded status of the plans and accrued pension cost at December 31, 2009 and 2008 | |||||||||
2009 | 2008 | |||||||||
Benefit obligation |
||||||||||
Vested benefit obligation |
$ | 123,524 | $ | 114,930 | ||||||
Nonvested benefit obligation |
3,754,388 | 4,146,366 | ||||||||
Accumulated benefit obligation |
3,877,912 | 4,261,296 | ||||||||
Additional benefits based on future salaries |
2,614,358 | 3,245,483 | ||||||||
Projected benefit obligation |
6,492,270 | 7,506,779 | ||||||||
Fair value of plan assets |
(2,612,295 | ) | (2,441,687 | ) | ||||||
Funded status |
3,879,975 | 5,065,092 | ||||||||
Unrecognized net transition obligation |
(91,291 | ) | (99,591 | ) | ||||||
Prior service cost |
161,977 | 169,216 | ||||||||
Unrecognized net loss |
(143,485 | ) | (1,424,708 | ) | ||||||
Accrued pension cost |
$ | 3,807,176 | $ | 3,710,009 | ||||||
Vested benefit |
$ | 135,501 | $ | 126,259 | ||||||
c. | Actuarial assumptions at December 31, 2009 and 2008 |
|||||||||
Discount rate used in determining present values |
2.25 | % | 2.00 | % | ||||||
Future salary increase rate |
3.00 | % | 3.00 | % | ||||||
Expected rate of return on plan assets |
1.50 | % | 2.25 | % | ||||||
d. | Contributions to the Funds for the year |
$ | 191,554 | $ | 202,263 | |||||
e. | Payments from the Funds for the year |
$ | 37,801 | $ | 28,990 | |||||
-22-
17. | INCOME TAX |
a. | A reconciliation of income tax expense based on income before income tax at statutory rate and income tax currently payable was as follows: |
Years Ended December 31 | ||||||||
2009 | 2008 | |||||||
Income tax expense based on income before
income tax at statutory rate (25%) |
$ | 23,745,246 | $ | 27,689,695 | ||||
Tax effect of the following: |
||||||||
Tax-exempt income |
(8,621,941 | ) | (9,610,935 | ) | ||||
Temporary and permanent differences |
3,124,974 | 1,815,594 | ||||||
Others |
247,050 | 41,235 | ||||||
Income tax credits used |
(9,914,570 | ) | (10,967,795 | ) | ||||
Income tax currently payable |
$ | 8,580,759 | $ | 8,967,794 | ||||
b. | Income tax expense consisted of the following: |
Years Ended December 31 | ||||||||
2009 | 2008 | |||||||
Income tax currently payable |
$ | 8,580,759 | $ | 8,967,794 | ||||
Income tax adjustments on prior years |
(1,155,113 | ) | (707,255 | ) | ||||
Other income tax adjustments |
15,921 | 203,850 | ||||||
Net change in deferred income tax assets |
||||||||
Investment tax credits |
(1,119,523 | ) | 1,224,537 | |||||
Temporary differences |
41,456 | (1,792,789 | ) | |||||
Valuation allowance |
(600,314 | ) | 2,929,513 | |||||
Income tax expense |
$ | 5,763,186 | $ | 10,825,650 | ||||
c. | Net deferred income tax assets consisted of the following: |
December 31 | ||||||||
2009 | 2008 | |||||||
Current deferred income tax assets |
||||||||
Investment tax credits |
$ | 3,210,254 | $ | 2,791,000 | ||||
Temporary differences |
||||||||
Allowance for sales returns and others |
794,507 | 710,098 | ||||||
Others |
58,649 | 149,602 | ||||||
$ | 4,063,410 | $ | 3,650,700 | |||||
Noncurrent deferred income tax assets |
||||||||
Investment tax credits |
$ | 11,521,487 | $ | 10,821,218 | ||||
Temporary differences |
||||||||
Depreciation |
1,909,152 | 1,625,499 | ||||||
Others |
132,336 | 450,901 | ||||||
Valuation allowance |
(5,799,332 | ) | (6,399,646 | ) | ||||
$ | 7,763,643 | $ | 6,497,972 | |||||
-23-
In May 2009, the amendment of Article 5 of the Income Tax Law of the Republic of China announced that the income tax rate of profit-seeking enterprises will be reduced from 25% to 20%, and will be effective starting in 2010. The Company recalculated its deferred tax assets in accordance with the amended Article and adjusted the resulting difference as an income tax expense. | |||
d. | Integrated income tax information: | ||
The balance of the imputation credit account as of December 31, 2009 and 2008 were NT $369,265 thousand and NT$521,634 thousand, respectively. | |||
The estimated and actual creditable ratios for distribution of earnings of 2009 and 2008 was 0.35% and 9.10%, respectively. | |||
The imputation credit allocated to shareholders is based on its balance as of the date of dividend distribution. The estimated creditable ratio may change when the actual distribution of imputation credit is made. | |||
e. | All earnings generated prior to December 31, 1997 have been appropriated. | ||
f. | As of December 31, 2009, investment tax credits consisted of the following: |
Total | Remaining | |||||||||||||||
Creditable | Creditable | Expiry | ||||||||||||||
Law/Statute | Item | Amount | Amount | Year | ||||||||||||
Statute for Upgrading Industries |
Purchase of machinery and equipment |
$ | 579,804 | $ | | 2009 | ||||||||||
1,216,551 | | 2010 | ||||||||||||||
4,644,652 | | 2011 | ||||||||||||||
3,457,388 | 3,457,388 | 2012 | ||||||||||||||
3,310,922 | 3,310,922 | 2013 | ||||||||||||||
$ | 13,209,317 | $ | 6,768,310 | |||||||||||||
Statute for Upgrading Industries |
Research and development expenditures |
$ | 2,663,784 | $ | | 2010 | ||||||||||
2,671,264 | 1,971,732 | 2011 | ||||||||||||||
2,691,517 | 2,691,517 | 2012 | ||||||||||||||
3,250,265 | 3,250,265 | 2013 | ||||||||||||||
$ | 11,276,830 | $ | 7,913,514 | |||||||||||||
Statute for Upgrading Industries |
Personnel training expenditures |
$ | 23,146 | $ | | 2010 | ||||||||||
19,293 | 19,293 | 2011 | ||||||||||||||
30,624 | 30,624 | 2012 | ||||||||||||||
$ | 73,063 | $ | 49,917 | |||||||||||||
Statute for Upgrading Industries |
Investments in important technology-based enterprises |
$ | 7,297 | $ | | 2009 | ||||||||||
79,804 | | 2010 | ||||||||||||||
$ | 87,101 | $ | | |||||||||||||
-24-
g. | The profits generated from the following projects are exempt from income tax for a five-year period: |
Tax-exemption Period | ||
Construction of Fab 14 Module A
|
2006 to 2010 | |
Construction of Fab 12 Module B and expansion of Fab 14 Module A
|
2007 to 2011 | |
Construction of Fab 14 Module B and expansion of Fab 12 and others
|
2008 to 2012 |
h. | The tax authorities have examined income tax returns of the Company through 2007. All investment tax credit adjustments assessed by the tax authorities have been recognized accordingly. |
18. | LABOR COST, DEPRECIATION AND AMORTIZATION |
Year Ended December 31, 2009 | ||||||||||||
Classified as | ||||||||||||
Classified as | Operating | |||||||||||
Cost of Sales | Expenses | Total | ||||||||||
Labor cost |
||||||||||||
Salary and bonus |
$ | 15,874,268 | $ | 12,218,675 | $ | 28,092,943 | ||||||
Labor and health insurance |
630,735 | 385,013 | 1,015,748 | |||||||||
Pension |
557,206 | 340,181 | 897,387 | |||||||||
Meal |
414,749 | 180,542 | 595,291 | |||||||||
Welfare |
155,795 | 97,282 | 253,077 | |||||||||
Others |
97,229 | 19,108 | 116,337 | |||||||||
$ | 17,729,982 | $ | 13,240,801 | $ | 30,970,783 | |||||||
Depreciation |
$ | 68,606,242 | $ | 3,842,623 | $ | 72,448,865 | ||||||
Amortization |
$ | 1,199,386 | $ | 657,618 | $ | 1,857,004 | ||||||
Year Ended December 31, 2008 | ||||||||||||
Classified as | ||||||||||||
Classified as | Operating | |||||||||||
Cost of Sales | Expenses | Total | ||||||||||
Labor cost |
||||||||||||
Salary and bonus |
$ | 17,088,512 | $ | 11,989,661 | $ | 29,078,173 | ||||||
Labor and health insurance |
677,817 | 379,196 | 1,057,013 | |||||||||
Pension |
587,281 | 328,669 | 915,950 | |||||||||
Meal |
437,910 | 174,906 | 612,816 | |||||||||
Welfare |
174,641 | 100,989 | 275,630 | |||||||||
Others |
190,323 | 15,979 | 206,302 | |||||||||
$ | 19,156,484 | $ | 12,989,400 | $ | 32,145,884 | |||||||
Depreciation |
$ | 68,373,886 | $ | 3,701,241 | $ | 72,075,127 | ||||||
Amortization |
$ | 1,771,919 | $ | 663,434 | $ | 2,435,353 | ||||||
19. | SHAREHOLDERS EQUITY | |
As of December 31, 2009, 1,097,513 thousand ADSs of the Company were traded on the NYSE. The number of common shares represented by the ADSs is 5,487,565 thousand (one ADS represents five common shares). |
-25-
December 31 | ||||||||
2009 | 2008 | |||||||
Additional paid-in capital |
$ | 23,457,805 | $ | 17,962,468 | ||||
From merger |
22,805,390 | 22,805,390 | ||||||
From convertible bonds |
8,893,190 | 8,893,190 | ||||||
From long-term investments |
329,570 | 214,152 | ||||||
Donations |
55 | 55 | ||||||
$ | 55,486,010 | $ | 49,875,255 | |||||
a. | Legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve equals the Companys paid-in capital; | ||
b. | Special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge; | ||
c. | Bonus to directors and profit sharing to employees of the Company of not more than 0.3% and not less than 1% of the remainder, respectively. Directors who also serve as executive officers of the Company are not entitled to receive the bonus to directors. The Company may issue profit sharing to employees in stock of an affiliated company meeting the conditions set by the Board of Directors or, by the person duly authorized by the Board of Directors; | ||
d. | Any balance left over shall be allocated according to the resolution of the shareholders meeting. |
-26-
Dividends Per Share | ||||||||||||||||
Appropriation of Earnings | (NT$) | |||||||||||||||
For Fiscal | For Fiscal | For Fiscal | For Fiscal | |||||||||||||
Year 2008 | Year 2007 | Year 2008 | Year 2007 | |||||||||||||
Legal capital reserve |
$ | 9,993,317 | $ | 10,917,709 | ||||||||||||
Special capital reserve |
(391,857 | ) | (237,693 | ) | ||||||||||||
Profit sharing to employees in cash |
| 3,939,883 | ||||||||||||||
Profit sharing to employees in stock |
| 3,939,883 | ||||||||||||||
Cash dividends to shareholders |
76,876,312 | 76,881,311 | $ | 3.00 | $ | 3.00 | ||||||||||
Stock dividends to shareholders |
512,509 | 512,542 | 0.02 | 0.02 | ||||||||||||
Bonus to directors |
| 176,890 | ||||||||||||||
$ | 86,990,281 | $ | 96,130,525 | |||||||||||||
-27-
20. | STOCK-BASED COMPENSATION PLANS | |
The Companys Employee Stock Option Plans, consisting of the 2004 Plan, 2003 Plan and 2002 Plan were approved by the SFB on January 6, 2005, October 29, 2003 and June 25, 2002, respectively. The maximum number of options authorized to be granted under the 2004 Plan, 2003 Plan and 2002 Plan was 11,000 thousand, 120,000 thousand and 100,000 thousand, respectively, with each option eligible to subscribe for one common share when exercisable. The options may be granted to qualified employees of the Company or any of its domestic or foreign subsidiaries, in which the Companys shareholding with voting rights, directly or indirectly, is more than fifty percent (50%). The options of all the plans are valid for ten years and exercisable at certain percentages subsequent to the second anniversary of the grant date. Under the terms of the plans, the options are granted at an exercise price equal to the closing price of the Companys common shares listed on the TSE on the grant date. | ||
Options of the plans that had never been granted or had been granted but subsequently canceled had expired as of December 31, 2009. | ||
Information about outstanding options for the years ended December 31, 2009 and 2008 was as follows: |
Weighted- | ||||||||
Number of | average | |||||||
Options | Exercise Price | |||||||
(In Thousands) | (NT$) | |||||||
Year ended December 31, 2009 |
||||||||
Balance, beginning of year |
36,234 | $ | 34.0 | |||||
Options granted |
175 | 34.0 | ||||||
Options exercised |
(7,272 | ) | 35.8 | |||||
Options canceled |
(327 | ) | 46.5 | |||||
Balance, end of year |
28,810 | 33.5 | ||||||
Year ended December 31, 2008 |
||||||||
Balance, beginning of year |
41,875 | 35.6 | ||||||
Options granted |
767 | 35.2 | ||||||
Options exercised |
(6,027 | ) | 37.7 | |||||
Options canceled |
(381 | ) | 46.5 | |||||
Balance, end of year |
36,234 | 35.3 | ||||||
-28-
As of December 31, 2009, information about outstanding options was as follows: |
Options Outstanding | ||||||||||||||
Weighted-average | ||||||||||||||
Remaining | Weighted-average | |||||||||||||
Range of Exercise | Number of Options | Contractual Life | Exercise Price | |||||||||||
Price (NT$) | (In Thousands) | (Years) | (NT$) | |||||||||||
$ | 22.8-$32.0 | 21,179 | 3.18 | $ | 29.1 | |||||||||
38.0- 50.1 | 7,631 | 4.88 | 45.5 | |||||||||||
28,810 | 3.63 | 33.5 | ||||||||||||
As of December 31, 2009, all of the above outstanding options were exercisable. | ||
No compensation cost was recognized under the intrinsic value method for the years ended December 31, 2009 and 2008. Had the Company used the fair value based method to evaluate the options using the Black-Scholes model, the assumptions and pro forma results of the Company for the years ended December 31, 2009 and 2008 would have been as follows: |
Years Ended December 31 | ||||||||
2009 | 2008 | |||||||
Assumptions: |
||||||||
Expected dividend yield |
1.00%-3.44 | % | 1.00%-3.44 | % | ||||
Expected volatility |
43.77%-46.15 | % | 43.77%-46.15 | % | ||||
Risk free interest rate |
3.07%-3.85 | % | 3.07%-3.85 | % | ||||
Expected life |
5 years | 5 years | ||||||
Net income: |
||||||||
Net income as reported |
$ | 89,217,836 | $ | 99,933,168 | ||||
Pro forma net income |
88,838,182 | 100,037,622 | ||||||
Earnings per share (EPS) after income tax (NT$): |
||||||||
Basic EPS as reported |
$ | 3.45 | $ | 3.84 | ||||
Pro forma basic EPS |
3.44 | 3.84 | ||||||
Diluted EPS as reported |
3.44 | 3.81 | ||||||
Pro forma diluted EPS |
3.43 | 3.81 |
21. | TREASURY STOCK |
Beginning | Stock | Ending | ||||||||||||||||||
Shares | Addition | Dividends | Retirement | Shares | ||||||||||||||||
Year ended December 31, 2008 |
||||||||||||||||||||
Parent company stock held by
subsidiaries |
34,096 | | 171 | 34,267 | | |||||||||||||||
Repurchase under share buyback plan |
800,000 | 495,549 | | 1,295,549 | | |||||||||||||||
834,096 | 495,549 | 171 | 1,329,816 | | ||||||||||||||||
The Company held a meeting of the Board of Directors on November 13, 2007 and approved a share buyback plan to repurchase the Companys common shares up to 800,000 thousand shares listed on the TSE during the period from November 14, 2007 to January 13, 2008 for the buyback price in the range from NT$43.2 to NT$94.2. The Company had repurchased 800,000 thousand common shares. All the treasury stock repurchased under this share buyback plan was retired in February 2008. |
-29-
The Company held a meeting of the Board of Directors on May 13, 2008 and approved a share buyback plan to repurchase the Companys common shares up to 500,000 thousand shares listed on the TSE during the period from May 14, 2008 to July 13, 2008 for the buyback price in the range from NT$48.25 to NT$100.50. The Company had repurchased 216,674 thousand common shares. All the treasury stock repurchased under this share buyback plan was retired in August 2008. | ||
The Company held a meeting of the Board of Directors on August 12, 2008 and approved a share buyback plan to repurchase the Companys common shares up to 283,000 thousand shares listed on the TSE during the period from August 13, 2008 to October 12, 2008 for the buyback price in the range from NT$42.85 to NT$86.20. The Company had repurchased 278,875 thousand common shares. All the treasury stock repurchased under this share buyback plan was retired in November 2008. | ||
As discussed in Note 10, the Company merged Chi Cherng and Hsin Ruey in the third quarter of 2008. The Companys common shares held by Chi Cherng and Hsin Ruey in the number of 34,267 thousand shares were retired in August 2008. | ||
22. | EARNINGS PER SHARE | |
EPS is computed as follows: |
Number of | EPS (NT$) | |||||||||||||||||||
Amounts (Numerator) | Shares | Before | After | |||||||||||||||||
Before | After | (Denominator) | Income | Income | ||||||||||||||||
Income Tax | Income Tax | (In Thousands) | Tax | Tax | ||||||||||||||||
Year ended December 31, 2009 |
||||||||||||||||||||
Basic EPS |
||||||||||||||||||||
Earnings available to
common shareholders |
$ | 94,981,022 | $ | 89,217,836 | 25,835,802 | $ | 3.68 | $ | 3.45 | |||||||||||
Effect of dilutive
potential common shares |
| | 77,801 | |||||||||||||||||
Diluted EPS |
||||||||||||||||||||
Earnings available to
common shareholders
(including effect of
dilutive potential
common shares) |
$ | 94,981,022 | $ | 89,217,836 | 25,913,603 | $ | 3.67 | $ | 3.44 | |||||||||||
Year ended December 31, 2008 |
||||||||||||||||||||
Basic EPS |
||||||||||||||||||||
Earnings available to
common shareholders |
$ | 110,758,818 | $ | 99,933,168 | 26,039,186 | $ | 4.25 | $ | 3.84 | |||||||||||
Effect of dilutive
potential common shares |
| | 196,493 | |||||||||||||||||
Diluted EPS |
||||||||||||||||||||
Earnings available to
common shareholders
(including effect of
dilutive potential
common shares) |
$ | 110,758,818 | $ | 99,933,168 | 26,235,679 | $ | 4.22 | $ | 3.81 | |||||||||||
-30-
As discussed in Note 3, effective January 1, 2008, the Company adopted Interpretation 2007-052 that requires companies to record profit sharing to employees as an expense rather than as an appropriation of earnings. If the Company may settle the obligation by cash, by issuing shares, or in combination of both cash and shares, profit sharing to employees which will be settled in shares should be included in the weighted average number of shares outstanding in calculation of diluted EPS, if the shares have a dilutive effect. The number of shares is estimated by dividing the amount of profit sharing to employees in stock by the closing price (after considering the dilutive effect of dividends) of the common shares on the balance sheet date. Such dilutive effect of the potential shares needs to be included in the calculation of diluted EPS until the shares of profit sharing to employees are resolved in the shareholders meeting in the following year. | ||
The average number of shares outstanding for EPS calculation has been retroactively adjusted for the issuance of stock dividends. This adjustment caused both of the basic and diluted after income tax EPS for the year ended December 31, 2008 to decrease from NT$3.86 to NT$3.84 and NT$3.83 to NT$3.81, respectively. | ||
23. | DISCLOSURES FOR FINANCIAL INSTRUMENTS |
a. | Fair values of financial instruments were as follows: |
December 31 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||
Assets |
||||||||||||||||
Financial assets at fair value through
profit or loss |
$ | 181,743 | $ | 181,743 | $ | 42,460 | $ | 42,460 | ||||||||
Available-for-sale financial assets |
1,046,672 | 1,046,672 | 2,032,658 | 2,032,658 | ||||||||||||
Held-to-maturity financial assets |
22,163,898 | 22,251,517 | 17,643,324 | 17,674,733 | ||||||||||||
Liabilities |
||||||||||||||||
Financial liabilities at fair value
through profit or loss |
| | 83,618 | 83,618 | ||||||||||||
Bonds payable (including current portion) |
4,500,000 | 4,574,979 | 12,500,000 | 12,612,423 | ||||||||||||
Other long-term payables (including
current portion) |
1,185,534 | 1,185,534 | 1,957,673 | 1,957,673 |
b. | Methods and assumptions used in the estimation of fair values of financial instruments |
1) | The aforementioned financial instruments do not include cash and cash equivalents, receivables, other financial assets, refundable deposits, payables and guarantee deposits. The carrying amounts of these financial instruments approximate their fair values due to their short maturities. | ||
2) | Except for derivatives and structured time deposits, fair values of financial assets at fair value through profit or loss, available-for-sale and held-to-maturity financial assets were based on their quoted market prices. | ||
3) | The fair values of those derivatives and structured time deposits are determined using valuation techniques incorporating estimates and assumptions that were consistent with prevailing market conditions. | ||
4) | Fair value of the bonds payable was based on their quoted market price. | ||
5) | Fair value of other long-term payables was based on the present value of expected cash flows, which approximates their carrying amount. |
-31-
c. | The changes in fair value of derivatives contracts which were outstanding as of December 31, 2009 and 2008 estimated using valuation techniques were recognized as net gains of NT$181,743 thousand and net losses of NT$41,158 thousand, respectively. | ||
d. | As of December 31, 2009 and 2008, financial assets exposed to fair value interest rate risk were NT$23,392,313 thousand and NT$19,718,442 thousand, respectively and financial liabilities exposed to fair value interest rate risk were NT$4,500,000 thousand and NT$12,583,618 thousand, respectively. | ||
e. | Movements of the unrealized gains or losses on financial instruments for the years ended December 31, 2009 and 2008 were as follows: |
Year Ended December 31, 2009 | ||||||||||||
From | From | |||||||||||
Available- | Available-for- | |||||||||||
for-sale | sale Financial | |||||||||||
Financial | Assets Held by | |||||||||||
Assets | Investees | Total | ||||||||||
Balance, beginning of year |
$ | 32,658 | $ | (320,000 | ) | $ | (287,342 | ) | ||||
Recognized directly in shareholders equity |
51,384 | 726,949 | 778,333 | |||||||||
Removed from shareholders equity and
recognized in earnings |
(37,370 | ) | | (37,370 | ) | |||||||
Balance, end of year |
$ | 46,672 | $ | 406,949 | $ | 453,621 | ||||||
Year Ended December 31, 2008 | ||||||||||||
From | From | |||||||||||
Available- | Available-for- | |||||||||||
for-sale | sale Financial | |||||||||||
Financial | Assets Held by | |||||||||||
Assets | Investees | Total | ||||||||||
Balance, beginning of year |
$ | 266,573 | $ | 414,424 | $ | 680,997 | ||||||
Recognized directly in shareholders equity |
209,489 | (734,424 | ) | (524,935 | ) | |||||||
Removed from shareholders equity and
recognized in earnings |
(443,404 | ) | | (443,404 | ) | |||||||
Balance, end of year |
$ | 32,658 | $ | (320,000 | ) | $ | (287,342 | ) | ||||
f. | Information about financial risks |
1) | Market risk. The derivative financial instruments categorized as financial assets/liabilities at fair value through profit or loss are mainly used to hedge the exchange rate fluctuations of foreign-currency assets and liabilities; therefore, the market risk of derivatives will be offset by the foreign exchange risk of these hedged items. Available-for-sale financial assets and held-to-maturity financial assets held by the Company are mainly fixed-interest-rate debt securities; therefore, the fluctuations in market interest rates will result in changes in fair values of these debt securities. Subject to turmoil in the global financial market, the Company had evaluated its financial instruments and the Company believed the exposure to market risk as of December 31, 2009 was not significant. |
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2) | Credit risk. Credit risk represents the potential loss that would be incurred by the Company if the counter-parties or third-parties breached contracts. Financial instruments with positive fair values at the balance sheet date are evaluated for credit risk. Subject to turmoil in the global financial market, the Company evaluated whether the financial instruments for any possible counter-party or third-parties are reputable financial institutions, business enterprises, and government agencies and accordingly, the Company believed that the Companys exposure to credit risk as of December 31, 2009 was not significant. | ||
3) | Liquidity risk. The Company has sufficient operating capital to meet cash needs upon settlement of derivative financial instruments and bonds payable. Therefore, the liquidity risk is low. | ||
4) | Cash flow interest rate risk. The Company mainly invests in fixed-interest-rate debt securities. Therefore, cash flows are not expected to fluctuate significantly due to changes in market interest rates. |
24. | RELATED PARTY TRANSACTIONS | |
The Company engages in business transactions with the following related parties: |
a. | Subsidiaries | ||
TSMC North America TSMC China TSMC Europe TSMC Japan TSMC Korea |
|||
b. | Investees | ||
GUC (with a controlling financial interest) Xintec (with a controlling financial interest) VIS (accounted for using equity method) SSMC (accounted for using equity method) |
|||
c. | Indirect subsidiaries | ||
WaferTech, LLC (WaferTech) TSMC Technology, Inc. (TSMC Technology) TSMC Design Technology Canada, Inc. (TSMC Canada) |
|||
d. | Indirect investee | ||
VisEra Technology Company, Ltd. (VisEra), an indirect investee accounted for using equity method. | |||
e. | Others | ||
Related parties over which the Company has control or exercises significant influence but with which the Company had no material transactions. |
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Transactions with the aforementioned parties, other than those disclosed in other notes, are summarized as follows: |
2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
For the year |
||||||||||||||||
Sales |
||||||||||||||||
TSMC North America |
$ | 161,251,368 | 54 | $ | 192,986,719 | 58 | ||||||||||
Others |
2,231,343 | 1 | 1,814,440 | 1 | ||||||||||||
$ | 163,482,711 | 55 | $ | 194,801,159 | 59 | |||||||||||
Purchases |
||||||||||||||||
WaferTech |
$ | 5,560,707 | 18 | $ | 8,207,876 | 22 | ||||||||||
TSMC China |
3,787,113 | 12 | 4,717,676 | 12 | ||||||||||||
SSMC |
3,537,659 | 11 | 4,441,795 | 12 | ||||||||||||
VIS |
3,312,656 | 10 | 3,209,028 | 8 | ||||||||||||
$ | 16,198,135 | 51 | $ | 20,576,375 | 54 | |||||||||||
Manufacturing expenses |
||||||||||||||||
Xintec (rent and outsourcing) |
$ | 36,101 | | $ | | | ||||||||||
VisEra (outsourcing) |
35,737 | | 72,174 | | ||||||||||||
$ | 71,838 | | $ | 72,174 | | |||||||||||
Marketing expenses commission |
||||||||||||||||
TSMC Europe |
$ | 325,463 | 16 | $ | 367,846 | 16 | ||||||||||
TSMC Japan |
233,855 | 12 | 251,367 | 11 | ||||||||||||
Others |
24,726 | 1 | 16,408 | 1 | ||||||||||||
$ | 584,044 | 29 | $ | 635,621 | 28 | |||||||||||
Research and development expenses |
||||||||||||||||
TSMC Technology (primarily consulting fee) |
$ | 409,686 | 2 | $ | 352,900 | 2 | ||||||||||
TSMC Canada (primarily consulting fee) |
157,527 | 1 | 172,291 | 1 | ||||||||||||
Others |
49,251 | | 19,934 | | ||||||||||||
$ | 616,464 | 3 | $ | 545,125 | 3 | |||||||||||
Sales of property, plant and equipment |
||||||||||||||||
Xintec |
$ | 58,450 | 91 | $ | | | ||||||||||
TSMC China |
595 | 1 | 1,849,317 | 91 | ||||||||||||
Other |
263 | | 10,843 | | ||||||||||||
$ | 59,308 | 92 | $ | 1,860,160 | 91 | |||||||||||
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2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
Non-operating income and gains |
||||||||||||||||
VIS (primarily technical
service income, see Note
27e) |
$ | 224,740 | 5 | $ | 296,250 | 4 | ||||||||||
TSMC China |
184,626 | 4 | 297,418 | 5 | ||||||||||||
SSMC (primarily technical
service income, see Note
27d) |
141,488 | 3 | 244,865 | 4 | ||||||||||||
VisEra |
| | 100,821 | 1 | ||||||||||||
Others |
263 | | 178 | | ||||||||||||
$ | 551,117 | 12 | $ | 939,532 | 14 | |||||||||||
As of December 31 |
||||||||||||||||
Receivables |
||||||||||||||||
TSMC North America |
$ | 22,203,242 | 98 | $ | 11,512,777 | 98 | ||||||||||
Others |
338,531 | 2 | 215,427 | 2 | ||||||||||||
$ | 22,541,773 | 100 | $ | 11,728,204 | 100 | |||||||||||
Other receivables |
||||||||||||||||
TSMC China |
$ | 111,103 | 45 | $ | 112,933 | 23 | ||||||||||
VIS |
81,663 | 33 | 42,969 | 9 | ||||||||||||
SSMC |
39,629 | 16 | 56,949 | 12 | ||||||||||||
TSMC North America |
8,676 | 4 | 256,624 | 52 | ||||||||||||
Others |
4,932 | 2 | 20,267 | 4 | ||||||||||||
$ | 246,003 | 100 | $ | 489,742 | 100 | |||||||||||
Payables |
||||||||||||||||
WaferTech |
$ | 561,165 | 27 | $ | 171,089 | 14 | ||||||||||
VIS |
529,060 | 26 | 317,491 | 26 | ||||||||||||
TSMC China |
481,500 | 24 | 117,417 | 10 | ||||||||||||
SSMC |
238,741 | 12 | 162,807 | 14 | ||||||||||||
TSMC Technology |
109,220 | 5 | 41,904 | 3 | ||||||||||||
TSMC North America |
4,222 | | 327,250 | 28 | ||||||||||||
Others |
115,434 | 6 | 64,392 | 5 | ||||||||||||
$ | 2,039,342 | 100 | $ | 1,202,350 | 100 | |||||||||||
Deferred credits |
||||||||||||||||
TSMC China |
$ | 7,970 | 17 | $ | 183,896 | 40 | ||||||||||
The sales prices and payment terms to related parties were not significantly different from those of sales to third parties. For other related party transactions, prices and terms were determined in accordance with mutual agreements. | ||
The Company leased certain buildings, facilities, and machinery and equipment from Xintec. The lease terms and prices were determined in accordance with mutual agreements. The rental expense was classified under manufacturing expenses. |
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The Company deferred the net gains (classified under the deferred credits) derived from sales of property, plant and equipment to TSMC China and VisEra, and then recognized such gains (classified under non-operating income and gains) over the depreciable lives of the disposed assets. | ||
The Company leased certain buildings and facilities to VisEra. The rental income was classified under non-operating income and gains. The lease terms and prices were determined in accordance with mutual agreements. The lease agreement between the Company and VisEra expired in April 2008. | ||
Compensation of directors and management personnel: |
Years Ended December 31 | ||||||||
2009 | 2008 | |||||||
Salaries, incentives and special compensation |
$ | 588,508 | $ | 272,325 | ||||
Bonus |
411,358 | 705,376 | ||||||
$ | 999,866 | $ | 977,701 | |||||
The information about the compensation of directors and management personnel is available in the annual report for the shareholders meeting. Total compensation expense for the year ended December 31, 2009 includes estimated profit sharing to employees and bonus to directors of the Company that relate to 2009 but will be paid in the following year. The actual amount will be finalized and approved upon the resolution of the shareholders meeting in 2010. The total compensation for the year ended December 31, 2008 included the bonuses appropriated from earnings of 2008 which was approved by the shareholders meeting held in 2009. | ||
25. | PLEDGED OR MORTGAGED ASSETS | |
As of December 31, 2009, the Company had pledged time deposits of NT$824,797 thousand (classified as other financial assets) as collateral for land lease agreements and customs duty guarantee. | ||
26. | SIGNIFICANT LONG-TERM LEASES | |
The Company leases several parcels of land from the Science Park Administration. These operating leases expire on various dates from March 2010 to December 2029 and can be renewed upon expiration. | ||
As of December 31, 2009, future lease payments were as follows: |
Year | Amount | |||
2010 |
$ | 355,842 | ||
2011 |
353,566 | |||
2012 |
353,566 | |||
2013 |
331,921 | |||
2014 |
318,935 | |||
2015 and thereafter |
2,754,388 | |||
$ | 4,468,218 | |||
-36-
27. | SIGNIFICANT COMMITMENTS AND CONTINGENCIES | |
Significant commitments and contingencies of the Company as of December 31, 2009, excluding those disclosed in other notes, were as follows: |
a. | Under a technical cooperation agreement with ITRI, the R.O.C. Government or its designee approved by the Company can use up to 35% of the Companys capacity if the Companys outstanding commitments to its customers are not prejudiced. The term of this agreement is for five years beginning from January 1, 1987 and is automatically renewed for successive periods of five years unless otherwise terminated by either party with one year prior notice. | ||
b. | Under several foundry agreements, the Company shall reserve a portion of its production capacity for certain major customers that have guarantee deposits with the Company. As of December 31, 2009 the Company had a total of US$29,582 thousand of guarantee deposits. | ||
c. | Under a Shareholders Agreement entered into with Philips and EDB Investments Pte Ltd. on March 30, 1999, the parties formed a joint venture company, SSMC, which is an integrated circuit foundry in Singapore. The Companys equity interest in SSMC was 32%. Nevertheless, Philips parted with its semiconductor company which was renamed as NXP B.V. in September 2006. The Company and NXP B.V. purchased all the SSMC shares owned by EDB Investments Pte Ltd. pro rata according to the Shareholders Agreement on November 15, 2006. After the purchase, the Company and NXP B.V. currently own approximately 39% and 61% of the SSMC shares respectively. The Company and Philips (now NXP B.V.) are required, in the aggregate, to purchase at least 70% of SSMCs capacity, but the Company alone is not required to purchase more than 28% of the capacity. If any party defaults on the commitment and the capacity utilization of SSMC fall below a specific percentage of its capacity, the defaulting party is required to compensate SSMC for all related unavoidable costs. | ||
d. | The Company provides technical services to SSMC under a Technical Cooperation Agreement (the Agreement) effective March 30, 1999. The Company receives compensation for such services computed at a specific percentage of net selling price of all products sold by SSMC. The Agreement shall remain in force for ten years and will be automatically renewed for successive periods of five years each unless pre-terminated by either party under certain conditions. | ||
e. | The Company provides a technology transfer to VIS under a Manufacturing License and Technology Transfer Agreement entered into on April 1, 2004. The Company receives compensation for such technology transfer in the form of royalty payments from VIS computed at specific percentages of net selling price of certain products sold by VIS. VIS agreed to reserve its certain capacity to manufacture for the Company certain products at prices as agreed by the parties. | ||
f. | TSMC, TSMC North America and WaferTech filed a series of lawsuits in late 2003 and 2004 against Semiconductor Manufacturing International Corporation, SMIC (Shanghai) and SMIC Americas (aggregately referring to as SMIC). The lawsuits alleged that SMIC infringed multiple TSMC, TSMC North America and WaferTech patents and misappropriated TSMC, TSMC North America and WaferTechs trade secrets. These suits were settled out of court on January 30, 2005. As part of the settlement, Semiconductor Manufacturing International Corporation shall pay US$175 million over six years to resolve TSMC, TSMC North America and WaferTechs claims. As of December 31, 2009, SMIC had paid US$135 million in accordance with the terms of this settlement agreement. In August 2006, TSMC, TSMC North America and WaferTech filed a lawsuit against SMIC in Alameda County Superior Court in California for breach of aforementioned settlement agreement, breach of promissory notes and trade secret misappropriation, seeking injunctive relief and monetary damages. In September 2006, SMIC filed a cross-complaint against TSMC, TSMC North America and WaferTech in the same court, alleging TSMC, TSMC North America and WaferTech of breach of the settlement agreement and implied covenant of good faith and fair dealing, in response to TSMC, TSMC North America and WaferTechs August complaint. In November 2006, SMIC filed a complaint with Beijing Peoples High Court against TSMC, TSMC North America and WaferTech alleging defamation and breach of good faith. The California State Superior Court of Alameda County issued an Order on |
-37-
TSMC, TSMC North America and WaferTechs pre-trial motion for a preliminary injunction against SMIC on September 7, 2007. In the Order, the Court found TSMC has demonstrated a significant likelihood that it will ultimately prevail on the merits of its claim for breach of certain paragraphs of the (2005) Settlement Agreement with SMIC. The Court also found TSMC has demonstrated a significant probability of establishing that SMIC retains and is using TSMC Information in SMICs 0.13um and smaller technologies, and there is significant threat of serious irreparable harm to TSMC if SMIC were to disclose or transfer that information before final resolution of the case. Therefore, the Court ordered that, effective immediately, SMIC must provide advance notice and an opportunity for TSMC, TSMC North America and WaferTech to object before disclosing items enumerated in the Court Order to SMICs third party partners. The Court, however, did not grant a preliminary injunction as requested by TSMC, TSMC North America and WaferTech. In January 2009, the court in the California action held a four-day bench trial to determine whether a Settlement Agreement existed between the parties, and if there were an agreement, the interpretation of certain terms. SMIC contended that there was no binding Settlement Agreement, and TSMC, TSMC North America and WaferTech contended that the Settlement Agreement signed on January 30, 2005 and finalized shortly thereafter and repeatedly ratified bound the parties. On March 10, 2009, the Court issued its Statement of Decision. The Court rejected SMICs contention, and found that the parties were bound by the Settlement Agreement identified by TSMC, TSMC North America and WaferTech. The Court also interpreted the meaning of certain provisions within the Settlement Agreement. Regarding the claims raised by SMIC in the Beijing lawsuit, the Beijing Peoples High Court has on June 10, 2009 rejected those claims and dismissed the lawsuit. On November 4, 2009, after a two-month trial, a jury in the California action found SMIC to have both breached the 2005 settlement agreement and misappropriated TSMC, TSMC North America and WaferTechs trade secrets. TSMC, TSMC North America and WaferTech have subsequently settled both lawsuits with SMIC. Pursuant to the new settlement agreement, the parties have agreed to the entry of a stipulated judgment in favor of TSMC, TSMC North America and WaferTech in the California action, and to the dismissal of SMICs appeal against the Beijing High Courts finding in favor of TSMC, TSMC North America and WaferTech. Under the new settlement agreement and the related stipulated judgment, SMIC has agreed to make cash payments by installments to TSMC totaling US$200 million, which are in addition to the US$135 million previously paid to TSMC under the 2005 settlement agreement, and to provide TSMC with other valuable consideration. |
28. | ADDITIONAL DISCLOSURES | |
Following are the additional disclosures required by the SFB for the Company and its investees: |
a. | Financing provided: None; | ||
b. | Endorsement/guarantee provided: None; | ||
c. | Marketable securities held: Please see Table 1 attached; | ||
d. | Marketable securities acquired or disposed of at costs or prices of at least NT$100 million or 20% of the paid-in capital: Please see Table 2 attached; | ||
e. | Acquisition of individual real estate properties at costs of at least NT$100 million or 20% of the paid-in capital: Please see Table 3 attached; | ||
f. | Disposal of individual real estate properties at prices of at least NT$100 million or 20% of the paid-in capital: None; | ||
g. | Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: Please see Table 4 attached; |
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h. | Receivable from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please see Table 5 attached; | ||
i. | Names, locations, and related information of investees on which the Company exercises significant influence: Please see Table 6 attached; | ||
j. | Information about derivatives of investees over which the Company has a controlling interest: | ||
TSMC China entered into forward exchange contracts during the year ended December 31, 2009 to manage exposures due to foreign exchange rate fluctuations. | |||
As of December 31, 2009, no forward exchange contracts of TSMC China was outstanding. For the year ended December 31, 2009, net losses arising from forward exchange contracts of TSMC China were NT$866 thousand. | |||
Xintec entered into forward exchange contracts during the year ended December 31, 2009 to manage exposures due to foreign exchange rate fluctuations. Outstanding forward exchange contracts as of December 31, 2009: |
Contract Amount | ||||
Maturity Date | (In Thousands) | |||
Sell US$/Buy NT$
|
February 2010 | US$21,300/NT$686,788 |
For the year ended December 31, 2009, net gains arising from forward exchange contracts of Xintec were NT$4,448 thousand. | |||
k. | Information on investment in Mainland China |
1) | The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, equity in the net gain or net loss, ending balance, amount received as dividends from the investee, and the limitation on investee: Please see Table 7 attached. | ||
2) | Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: Please see Note 24. |
29. | SEGMENT FINANCIAL INFORMATION |
a. | Industry financial information | ||
The Company operates in one industry. Therefore, the disclosure of industry financial information is not applicable to the Company. | |||
b. | Geographic information | ||
The Company has no significant foreign operations. Therefore, the disclosure of geographic information is not applicable to the Company. |
-39-
c. | Export sales |
Years Ended December 31 | ||||||||
Area | 2009 | 2008 | ||||||
Americas |
$ | 166,813,136 | $ | 199,512,258 | ||||
Asia |
59,496,755 | 49,386,819 | ||||||
Europe and others |
31,350,249 | 37,622,148 | ||||||
$ | 257,660,140 | $ | 286,521,225 | |||||
The export sales information is based on the amounts billed to customers within the areas. | |||
d. | Major customers representing at least 10% of gross sales |
Years Ended December 31 | ||||||||||||||||
2009 | 2008 | |||||||||||||||
Amount | % | Amount | % | |||||||||||||
Customer A |
$ | 161,251,368 | 54 | $ | 192,986,719 | 58 | ||||||||||
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December 31, 2009 | ||||||||||||||||||||||||
Held | Financial | Market Value or Net | ||||||||||||||||||||||
Company | Relationship with | Statement | Shares/Units | Carrying Value | Percentage of | Asset Value | ||||||||||||||||||
Name | Marketable Securities Type and Name | the Company | Account | (In Thousands) | (US$ in Thousands) | Ownership (%) | (US$ in Thousands) | Note | ||||||||||||||||
TSMC | Corporate bond |
|||||||||||||||||||||||
Taiwan Mobile Co., Ltd.
|
| Available-for-sale financial assets | | $ | 1,046,672 | N/A | $ | 1,046,672 | ||||||||||||||||
Formosa Petrochemical Corporation
|
| Held-to-maturity financial assets | | 3,178,551 | N/A | 3,200,302 | ||||||||||||||||||
Taiwan Power Company
|
| | | 3,004,941 | N/A | 3,011,743 | ||||||||||||||||||
Nan Ya Plastics Corporation
|
| | | 2,000,145 | N/A | 2,029,935 | ||||||||||||||||||
Formosa Plastics Corporation
|
| | | 1,671,815 | N/A | 1,685,345 | ||||||||||||||||||
China Steel Corporation
|
| | | 1,512,130 | N/A | 1,528,117 | ||||||||||||||||||
CPC Corporation, Taiwan
|
| | | 500,031 | N/A | 499,913 | ||||||||||||||||||
Taipei Fubon Commercial Bank Co., Ltd.
|
| | | 298,884 | N/A | 298,751 | ||||||||||||||||||
First Commercial Bank Co., Ltd.
|
| | | 99,814 | N/A | 99,815 | ||||||||||||||||||
Government bond |
||||||||||||||||||||||||
European Investment Bank Bonds
|
| Held-to-maturity financial assets | | 2,003,877 | N/A | 2,025,500 | ||||||||||||||||||
2003 Asian Development Bank Govt. Bond
|
| | | 893,710 | N/A | 875,103 | ||||||||||||||||||
Stock |
||||||||||||||||||||||||
TSMC Global
|
Subsidiary | Investments accounted for using equity method |
1 | 45,397,256 | 100 | 45,397,256 | ||||||||||||||||||
TSMC Partners
|
Subsidiary | | 988,268 | 32,545,619 | 100 | 32,545,619 | ||||||||||||||||||
VIS
|
Investee accounted for using equity method |
| 628,223 | 9,365,232 | 37 | 10,114,398 | ||||||||||||||||||
SSMC
|
Investee accounted for using equity method |
| 314 | 6,157,141 | 39 | 5,581,994 | ||||||||||||||||||
TSMC North America
|
Subsidiary | | 11,000 | 2,723,727 | 100 | 2,723,727 | ||||||||||||||||||
Xintec
|
Investee with a controlling financial interest |
| 93,081 | 1,475,014 | 41 | 1,437,395 | ||||||||||||||||||
GUC
|
Investee with a controlling financial interest |
| 46,688 | 983,126 | 35 | 7,913,592 | ||||||||||||||||||
TSMC Europe
|
Subsidiary | | | 159,467 | 100 | 159,467 | ||||||||||||||||||
TSMC Japan
|
Subsidiary | | 6 | 135,663 | 100 | 135,663 | ||||||||||||||||||
TSMC Korea
|
Subsidiary | | 80 | 18,519 | 100 | 18,519 | ||||||||||||||||||
United Industrial Gases Co., Ltd.
|
| Financial assets carried at cost | 16,783 | 193,584 | 10 | 297,655 | ||||||||||||||||||
Shin-Etsu Handotai Taiwan Co., Ltd.
|
| | 10,500 | 105,000 | 7 | 332,943 | ||||||||||||||||||
W.K. Technology Fund IV
|
| | 4,000 | 40,000 | 2 | 43,975 | ||||||||||||||||||
Fund |
||||||||||||||||||||||||
Horizon Ventures Fund
|
| Financial assets carried at cost | | 103,992 | 12 | 103,992 | ||||||||||||||||||
Crimson Asia Capital
|
| | | 59,412 | 1 | 59,412 | ||||||||||||||||||
Capital |
||||||||||||||||||||||||
TSMC China
|
Subsidiary | Investments accounted for using equity method |
| 2,961,043 | 100 | 2,958,707 | ||||||||||||||||||
VTAF III
|
Subsidiary | | | 1,309,615 | 98 | 1,292,412 | ||||||||||||||||||
VTAF II
|
Subsidiary | | | 1,122,810 | 98 | 1,117,773 | ||||||||||||||||||
Emerging Alliance
|
Subsidiary | | | 305,866 | 99 | 305,866 |
-41-
December 31, 2009 | ||||||||||||||||||||||||
Held | Financial | Market Value or Net | ||||||||||||||||||||||
Company | Marketable Securities | Relationship with | Statement | Shares/Units | Carrying Value | Percentage of | Asset Value | |||||||||||||||||
Name | Type and Name | the Company | Account | (In Thousands) | (US$ in Thousands) | Ownership (%) | (US$ in Thousands) | Note | ||||||||||||||||
TSMC Partners | Corporate bond |
|||||||||||||||||||||||
General Elec Cap Corp. Mtn
|
| Held-to-maturity financial assets | | US$ | 20,543 | N/A | US$ | 21,312 | ||||||||||||||||
General Elec Cap Corp. Mtn
|
| | | US$ | 20,219 | N/A | US$ | 21,182 | ||||||||||||||||
Common stock |
||||||||||||||||||||||||
TSMC Development, Inc. (TSMC Development)
|
Subsidiary | Investments accounted for using equity method | 1 | US$ | 340,387 | 100 | US$ | 340,387 | ||||||||||||||||
VisEra Holding Company
|
Investee accounted for using equity method |
| 43,000 | US$ | 70,967 | 49 | US$ | 70,967 | ||||||||||||||||
InveStar Semiconductor Development Fund, Inc. (II)
LDC. (ISDF II)
|
Subsidiary | | 21,415 | US$ | 13,741 | 97 | US$ | 13,741 | ||||||||||||||||
TSMC Technology
|
Subsidiary | | 1 | US$ | 9,071 | 100 | US$ | 9,071 | ||||||||||||||||
InveStar Semiconductor Development Fund, Inc. (ISDF)
|
Subsidiary | | 7,680 | US$ | 7,336 | 97 | US$ | 7,336 | ||||||||||||||||
TSMC Canada
|
Subsidiary | | 2,300 | US$ | 3,193 | 100 | US$ | 3,193 | ||||||||||||||||
Mcube Inc.
|
Investee accounted for using equity method |
| 5,333 | US$ | 800 | 70 | US$ | 800 | ||||||||||||||||
Preferred stock |
||||||||||||||||||||||||
Mcube Inc.
|
Investee accounted for using equity method |
Investments accounted for using equity method | 1,000 | US$ | 1,000 | 10 | US$ | 1,000 | ||||||||||||||||
TSMC Development | Corporate bond |
|||||||||||||||||||||||
GE Capital Corp.
|
| Held-to-maturity financial assets | | US$ | 20,334 | N/A | US$ | 21,182 | ||||||||||||||||
JP Morgan Chase & Co.
|
| | | US$ | 15,000 | N/A | US$ | 15,000 | ||||||||||||||||
Stock |
||||||||||||||||||||||||
WaferTech
|
Subsidiary | Investments accounted for using equity method | 293,637 | US$ | 154,432 | 100 | US$ | 154,432 | ||||||||||||||||
Emerging Alliance | Common stock |
|||||||||||||||||||||||
RichWave Technology Corp.
|
| Financial assets carried at cost | 4,247 | US$ | 1,648 | 10 | US$ | 1,648 | ||||||||||||||||
Global Investment Holding Inc.
|
| | 10,000 | US$ | 3,065 | 6 | US$ | 3,065 | ||||||||||||||||
Preferred stock |
||||||||||||||||||||||||
Audience, Inc.
|
| Financial assets carried at cost | 1,654 | US$ | 250 | 1 | US$ | 250 | ||||||||||||||||
Axiom Microdevices, Inc. | | | 1,000 | US$ | 24 | 1 | US$ | 24 | ||||||||||||||||
Mosaic Systems, Inc.
|
| | 2,481 | US$ | 12 | 6 | US$ | 12 | ||||||||||||||||
Next IO, Inc.
|
| | 800 | US$ | 500 | 1 | US$ | 500 | ||||||||||||||||
Optichron, Inc.
|
| | 1,281 | US$ | 1,072 | 2 | US$ | 1,072 | ||||||||||||||||
Pixim, Inc.
|
| | 4,641 | US$ | 1,137 | 2 | US$ | 1,137 | ||||||||||||||||
QST Holdings, LLC
|
| | | US$ | 131 | 4 | US$ | 131 | ||||||||||||||||
Teknovus, Inc.
|
| | 6,977 | US$ | 1,327 | 2 | US$ | 1,327 | ||||||||||||||||
Capital |
||||||||||||||||||||||||
VentureTech Alliance Holdings, LLC (VTA Holdings)
|
Subsidiary | Investments accounted for using equity method | | | 7 | | ||||||||||||||||||
VTAF II | Common stock |
|||||||||||||||||||||||
Leadtrend
|
| Available-for-sale financial assets | 1,515 | US$ | 9,721 | 4 | US$ | 9,721 | ||||||||||||||||
RichWave Technology Corp.
|
| Financial assets carried at cost | 1,043 | US$ | 730 | 1 | US$ | 730 | ||||||||||||||||
Sentelic
|
| | 1,200 | US$ | 2,040 | 15 | US$ | 2,040 | ||||||||||||||||
Preferred stock |
||||||||||||||||||||||||
5V Technologies, Inc.
|
| Financial assets carried at cost | 2,890 | US$ | 2,168 | 4 | US$ | 2,168 | ||||||||||||||||
Aquantia
|
| | 3,974 | US$ | 3,816 | 5 | US$ | 3,816 | ||||||||||||||||
Audience, Inc.
|
| | 7,956 | US$ | 1,838 | 2 | US$ | 1,838 | ||||||||||||||||
Axiom Microdevices, Inc.
|
| | 759 | US$ | 650 | 13 | US$ | 650 |
-42-
December 31, 2009 | ||||||||||||||||||||||||
Held | Financial | Market Value or Net | ||||||||||||||||||||||
Company | Marketable Securities | Relationship with | Statement | Shares/Units | Carrying Value | Percentage of | Asset Value | |||||||||||||||||
Name | Type and Name | the Company | Account | (In Thousands) | (US$ in Thousands) | Ownership (%) | (US$ in Thousands) | Note | ||||||||||||||||
Beceem Communications
|
| Financial assets carried at cost | 834 | US$ | 1,701 | 1 | US$ | 1,701 | ||||||||||||||||
Impinj, Inc.
|
| | 475 | US$ | 1,000 | | US$ | 1,000 | ||||||||||||||||
Next IO, Inc.
|
| | 3,795 | US$ | 953 | 2 | US$ | 953 | ||||||||||||||||
Optichron, Inc.
|
| | 2,784 | US$ | 2,664 | 4 | US$ | 2,664 | ||||||||||||||||
Pixim, Inc.
|
| | 33,347 | US$ | 1,878 | 2 | US$ | 1,878 | ||||||||||||||||
Power Analog Microelectronics
|
| | 7,027 | US$ | 3,383 | 19 | US$ | 3,383 | ||||||||||||||||
QST Holdings, LLC
|
| | | US$ | 593 | 13 | US$ | 593 | ||||||||||||||||
Teknovus, Inc.
|
| | 1,599 | US$ | 454 | | US$ | 454 | ||||||||||||||||
Xceive
|
| | 3,936 | US$ | 1,516 | 2 | US$ | 1,516 | ||||||||||||||||
Capital |
||||||||||||||||||||||||
VTA Holdings
|
Subsidiary | Investments accounted for using equity method |
| | 31 | | ||||||||||||||||||
VTAF III | Common stock |
|||||||||||||||||||||||
Mutual-Pak Technology Co., Ltd.
|
Subsidiary | Investments accounted for using equity method |
9,180 | US$ | 2,112 | 59 | US$ | 2,112 | ||||||||||||||||
Acionn Technology Corporation
|
Investee accounted for using equity method |
| 4,500 | US$ | 566 | 42 | US$ | 566 | ||||||||||||||||
Preferred stock |
||||||||||||||||||||||||
Auramicro, Inc.
|
| Financial assets carried at cost | 4,694 | US$ | 1,408 | 20 | US$ | 1,408 | ||||||||||||||||
BridgeLux, Inc.
|
| | 4,955 | US$ | 6,391 | 4 | US$ | 6,391 | ||||||||||||||||
Exclara, Inc.
|
| | 21,708 | US$ | 4,568 | 18 | US$ | 4,568 | ||||||||||||||||
GTBF, Inc.
|
| | 1,154 | US$ | 1,500 | N/A | US$ | 1,500 | ||||||||||||||||
InvenSense, Inc.
|
| | 816 | US$ | 1,000 | 1 | US$ | 1,000 | ||||||||||||||||
LiquidLeds Lighting Corp.
|
| | 1,600 | US$ | 800 | 11 | US$ | 800 | ||||||||||||||||
M2000, Inc.
|
| | 3,000 | US$ | 3,000 | 5 | US$ | 3,000 | ||||||||||||||||
Neoconix, Inc.
|
| | 3,283 | US$ | 4,608 | 6 | US$ | 4,608 | ||||||||||||||||
Powervation, Ltd.
|
| | 310 | US$ | 4,678 | 16 | US$ | 4,678 | ||||||||||||||||
Quellan, Inc.
|
| | 3,106 | US$ | 457 | 6 | US$ | 457 | ||||||||||||||||
Silicon Technical Services, LLC
|
| | 1,055 | US$ | 1,208 | 1 | US$ | 1,208 | ||||||||||||||||
Tilera, Inc.
|
| | 3,222 | US$ | 2,781 | 3 | US$ | 2,781 | ||||||||||||||||
Validity Sensors, Inc.
|
| | 8,070 | US$ | 3,089 | 3 | US$ | 3,089 | ||||||||||||||||
Capital |
||||||||||||||||||||||||
Growth Fund Limited (Growth Fund)
|
Subsidiary | Investments accounted for using equity method |
| US$ | 823 | 100 | US$ | 823 | ||||||||||||||||
VTA Holdings
|
Subsidiary | | | | 62 | | ||||||||||||||||||
Growth Fund | Common stock |
|||||||||||||||||||||||
Staccato
|
| Financial assets carried at cost | 10 | US$ | 25 | | US$ | 25 | ||||||||||||||||
SiliconBlue Technologies, Inc.
|
| | 5,107 | US$ | 762 | 2 | US$ | 762 | ||||||||||||||||
ISDF | Common stock |
|||||||||||||||||||||||
Memsic, Inc.
|
| Available-for-sale financial assets | 1,364 | US$ | 4,472 | 6 | US$ | 4,472 | ||||||||||||||||
Capella Microsystems (Taiwan), Inc.
|
| Financial assets carried at cost | 557 | US$ | 154 | 2 | US$ | 154 | ||||||||||||||||
Preferred stock |
||||||||||||||||||||||||
Integrated Memory Logic, Inc.
|
| Financial assets carried at cost | 2,872 | US$ | 1,221 | 9 | US$ | 1,221 | ||||||||||||||||
IP Unity, Inc.
|
| | 1,008 | US$ | 290 | 1 | US$ | 290 | ||||||||||||||||
Sonics, Inc.
|
| | 230 | US$ | 497 | 2 | US$ | 497 |
-43-
December 31, 2009 | ||||||||||||||||||||||||
Held | Financial | Market Value or Net | ||||||||||||||||||||||
Company | Marketable Securities | Relationship with | Statement | Shares/Units | Carrying Value | Percentage of | Asset Value | |||||||||||||||||
Name | Type and Name | the Company | Account | (In Thousands) | (US$ in Thousands) | Ownership (%) | (US$ in Thousands) | Note | ||||||||||||||||
ISDF II | Common stock |
|||||||||||||||||||||||
Memsic, Inc.
|
| Available-for-sale financial assets | 1,145 | US$ | 3,754 | 5 | US$ | 3,754 | ||||||||||||||||
Sonics, Inc.
|
| Financial assets carried at cost | 278 | US$ | 10 | 3 | US$ | 10 | ||||||||||||||||
Epic Communication, Inc.
|
| | 50 | US$ | 23 | | US$ | 23 | ||||||||||||||||
EON Technology, Corp.
|
| | 2,368 | US$ | 656 | 3 | US$ | 656 | ||||||||||||||||
Goyatek Technology, Corp.
|
| | 932 | US$ | 545 | 6 | US$ | 545 | ||||||||||||||||
Capella Microsystems (Taiwan), Inc.
|
| | 561 | US$ | 210 | 2 | US$ | 210 | ||||||||||||||||
Auden Technology MFG. Co., Ltd.
|
| | 1,049 | US$ | 223 | 3 | US$ | 223 | ||||||||||||||||
Preferred stock |
||||||||||||||||||||||||
Alchip Technologies Limited
|
| Financial assets carried at cost | 6,979 | US$ | 3,664 | 18 | US$ | 3,664 | ||||||||||||||||
FangTek, Inc.
|
| | 1,032 | US$ | 686 | 6 | US$ | 686 | ||||||||||||||||
Kilopass Technology, Inc.
|
| | 3,887 | US$ | 500 | 5 | US$ | 500 | ||||||||||||||||
Sonics, Inc.
|
| | 264 | US$ | 456 | 3 | US$ | 456 | ||||||||||||||||
GUC | Open-end mutual fund |
|||||||||||||||||||||||
Jih Sun Bond Fund
|
| Available-for-sale financial assets | 5,668 | US$ | 80,008 | | US$ | 80,008 | ||||||||||||||||
FSITC Taiwan Bond Fund
|
| | 352 | 60,005 | | 60,005 | ||||||||||||||||||
Cathay Bond Fund
|
| | 2,509 | 30,001 | | 30,001 | ||||||||||||||||||
Common stock |
||||||||||||||||||||||||
GUC-NA
|
Subsidiary | Investments accounted for using equity method |
800 | 38,617 | 100 | 38,617 | ||||||||||||||||||
GUC-Japan
|
Subsidiary | | 1 | 12,899 | 100 | 12,899 | ||||||||||||||||||
GUC-Europe
|
Subsidiary | | | 5,213 | 100 | 5,213 | ||||||||||||||||||
GUC-BVI
|
Subsidiary | | 550 | 17,466 | 100 | 17,466 | ||||||||||||||||||
Xintec | Capital |
|||||||||||||||||||||||
Compositech Ltd.
|
| Financial assets carried at cost | 587 | | 3 | | ||||||||||||||||||
TSMC Global | Corporate bond |
|||||||||||||||||||||||
Ab Svensk Exportkredit Swedish
|
| Available-for-sale financial assets | 5,000 | US$ | 5,144 | N/A | US$ | 5,144 | ||||||||||||||||
African Development Bank
|
| | 2,600 | US$ | 2,622 | N/A | US$ | 2,622 | ||||||||||||||||
Allstate Life Global Fdg
|
| | 220 | US$ | 221 | N/A | US$ | 221 | ||||||||||||||||
Asian Development Bank
|
| | 2,500 | US$ | 2,497 | N/A | US$ | 2,497 | ||||||||||||||||
Astrazeneca Plc
|
| | 2,150 | US$ | 2,349 | N/A | US$ | 2,349 | ||||||||||||||||
Australia + New Zealand Bkg
|
| | 2,000 | US$ | 2,054 | N/A | US$ | 2,054 | ||||||||||||||||
Banco Bilbao Vizcaya P R
|
| | 3,250 | US$ | 3,248 | N/A | US$ | 3,248 | ||||||||||||||||
Bank New York Inc. Medium
|
| | 2,100 | US$ | 2,262 | N/A | US$ | 2,262 | ||||||||||||||||
Bank of New York Mellon
|
| | 2,200 | US$ | 2,208 | N/A | US$ | 2,208 | ||||||||||||||||
Bear Stearns Cos Inc.
|
| | 5,000 | US$ | 4,974 | N/A | US$ | 4,974 | ||||||||||||||||
Bear Stearns Cos Inc.
|
| | 3,500 | US$ | 3,391 | N/A | US$ | 3,391 | ||||||||||||||||
Bhp Billiton Fin USA Ltd.
|
| | 2,000 | US$ | 2,129 | N/A | US$ | 2,129 | ||||||||||||||||
Bnp Paribas SA
|
| | 2,310 | US$ | 2,339 | N/A | US$ | 2,339 | ||||||||||||||||
Boeing Co.
|
| | 450 | US$ | 445 | N/A | US$ | 445 | ||||||||||||||||
Bsch Issuances Ltd.
|
| | 2,250 | US$ | 2,359 | N/A | US$ | 2,359 | ||||||||||||||||
Cello Part/Veri Wirelss
|
| | 2,000 | US$ | 2,068 | N/A | US$ | 2,068 |
-44-
December 31, 2009 | ||||||||||||||||||||||||
Held | Financial | Market Value or Net | ||||||||||||||||||||||
Company | Marketable Securities | Relationship with | Statement | Shares/Units | Carrying Value | Percentage of | Asset Value | |||||||||||||||||
Name | Type and Name | the Company | Account | (In Thousands) | (US$ in Thousands) | Ownership (%) | (US$ in Thousands) | Note | ||||||||||||||||
Citibank NA
|
| | 5,000 | US$ | 4,996 | N/A | US$ | 4,996 | ||||||||||||||||
Citigroup funding Inc.
|
| | 2,000 | US$ | 2,016 | N/A | US$ | 2,016 | ||||||||||||||||
Credit Suisse New York
|
| | 2,000 | US$ | 2,057 | N/A | US$ | 2,057 | ||||||||||||||||
European Investment Bank
|
| | 2,250 | US$ | 2,243 | N/A | US$ | 2,243 | ||||||||||||||||
Federal Farm Cr Bks
|
| | 2,250 | US$ | 2,254 | N/A | US$ | 2,254 | ||||||||||||||||
Finance for Danish Ind
|
| | 1,900 | US$ | 1,900 | N/A | US$ | 1,900 | ||||||||||||||||
General Elec Cap Corp.
|
| | 1,000 | US$ | 978 | N/A | US$ | 978 | ||||||||||||||||
General Elec Cap Corp.
|
| | 7,000 | US$ | 7,001 | N/A | US$ | 7,001 | ||||||||||||||||
General Elec Cap Corp. Fdic Gtd
|
| | 2,500 | US$ | 2,547 | N/A | US$ | 2,547 |
-45-
December 31, 2009 | ||||||||||||||||||||||
Held | Financial | Market Value or Net | ||||||||||||||||||||
Company | Marketable Securities | Relationship with | Statement | Shares/Units | Carrying Value | Percentage of | Asset Value | |||||||||||||||
Name | Type and Name | the Company | Account | (In Thousands) | (US$ in Thousands) | Ownership (%) | (US$ in Thousands) | Note | ||||||||||||||
Goldman Sachs Group Inc.
|
| Available-for-sale financial assets | 2,000 | US$ | 1,939 | N/A | US$ | 1,939 | ||||||||||||||
Goldman Sachs Group Incser 2
|
| | 3,000 | US$ | 3,012 | N/A | US$ | 3,012 | ||||||||||||||
Hewlett Packard Co.
|
| | 3,000 | US$ | 3,000 | N/A | US$ | 3,000 | ||||||||||||||
HSBC Fin Corp.
|
| | 2,315 | US$ | 2,233 | N/A | US$ | 2,233 | ||||||||||||||
HSBC USA Inc. Fdic Gtd Tlgp
|
| | 2,200 | US$ | 2,277 | N/A | US$ | 2,277 | ||||||||||||||
IBM Corp.
|
| | 1,800 | US$ | 1,796 | N/A | US$ | 1,796 | ||||||||||||||
International Business Machs
|
| | 3,000 | US$ | 3,027 | N/A | US$ | 3,027 | ||||||||||||||
Intl Bk Recon + Develop
|
| | 2,000 | US$ | 2,069 | N/A | US$ | 2,069 | ||||||||||||||
JP Morgan Chase + Co.
|
| | 2,500 | US$ | 2,523 | N/A | US$ | 2,523 | ||||||||||||||
JP Morgan Chase + Co. Fdic Gtd Tlg
|
| | 3,000 | US$ | 3,030 | N/A | US$ | 3,030 | ||||||||||||||
Kfw
|
| | 2,230 | US$ | 2,236 | N/A | US$ | 2,236 | ||||||||||||||
Kfw Medium Term Nts Book Entry
|
| | 1,950 | US$ | 1,953 | N/A | US$ | 1,953 | ||||||||||||||
Kreditanstalt Fur Wiederaufbau
|
| | 650 | US$ | 673 | N/A | US$ | 673 | ||||||||||||||
Lloyds Tsb Bank Plc Ser 144A
|
| | 5,950 | US$ | 6,049 | N/A | US$ | 6,049 | ||||||||||||||
Mellon Fdg Corp.
|
| | 3,500 | US$ | 3,419 | N/A | US$ | 3,419 | ||||||||||||||
Met Life Glob Funding I
|
| | 2,100 | US$ | 2,142 | N/A | US$ | 2,142 | ||||||||||||||
Met Life Glob Funding I
|
| | 500 | US$ | 502 | N/A | US$ | 502 | ||||||||||||||
Metlife Inc.
|
| | 2,000 | US$ | 2,017 | N/A | US$ | 2,017 | ||||||||||||||
Metropolitan Life Global Fdg
|
| | 750 | US$ | 739 | N/A | US$ | 739 | ||||||||||||||
Metropolitan Life Global Fdg I
|
| | 3,340 | US$ | 3,278 | N/A | US$ | 3,278 | ||||||||||||||
Morgan Stanley
|
| | 2,200 | US$ | 2,212 | N/A | US$ | 2,212 | ||||||||||||||
Morgan Stanley
|
| | 2,000 | US$ | 2,032 | N/A | US$ | 2,032 | ||||||||||||||
Morgan Stanley Fdic Gtd Tlgp
|
| | 2,210 | US$ | 2,244 | N/A | US$ | 2,244 | ||||||||||||||
Morgan Stanley for Equity
|
| | 2,000 | US$ | 1,943 | N/A | US$ | 1,943 | ||||||||||||||
Nordea Bank Fld Plc
|
| | 2,250 | US$ | 2,240 | N/A | US$ | 2,240 | ||||||||||||||
Oesterreichische Kontrollbank
|
| | 2,000 | US$ | 2,059 | N/A | US$ | 2,059 | ||||||||||||||
Ontario (Province of)
|
| | 2,000 | US$ | 1,980 | N/A | US$ | 1,980 | ||||||||||||||
Paccar Finl Corp. Mtn Bk Ent
|
| | 1,000 | US$ | 1,007 | N/A | US$ | 1,007 | ||||||||||||||
Pricoa Global Fdg I Med Term
|
| | 1,750 | US$ | 1,638 | N/A | US$ | 1,638 | ||||||||||||||
Pricoa Global Funding 1
|
| | 1,200 | US$ | 1,167 | N/A | US$ | 1,167 | ||||||||||||||
Pricoa Global Fdg I Medium
|
| | 2,200 | US$ | 2,130 | N/A | US$ | 2,130 | ||||||||||||||
Royal Bk of Scotland Plc
|
| | 5,000 | US$ | 5,078 | N/A | US$ | 5,078 | ||||||||||||||
Royal Bk Scotlnd Grp Plc 144A
|
| | 9,450 | US$ | 9,578 | N/A | US$ | 9,578 | ||||||||||||||
Southern Co.
|
| | 600 | US$ | 602 | N/A | US$ | 602 | ||||||||||||||
Sovereign Bancorp Fdic Gtd Tlg
|
| | 2,200 | US$ | 2,246 | N/A | US$ | 2,246 | ||||||||||||||
State Str Corp.
|
| | 1,940 | US$ | 1,920 | N/A | US$ | 1,920 | ||||||||||||||
Suncorp Metway Ltd.
|
| | 2,000 | US$ | 2,004 | N/A | US$ | 2,004 | ||||||||||||||
Suncorp Metway Ltd.
|
| | 5,000 | US$ | 5,170 | N/A | US$ | 5,170 | ||||||||||||||
Svenska Handelsbanken Ab
|
| | 2,200 | US$ | 2,214 | N/A | US$ | 2,214 | ||||||||||||||
Swedbank Ab
|
| | 2,000 | US$ | 1,994 | N/A | US$ | 1,994 | ||||||||||||||
Swedbank Foreningssparbanken A
|
| | 1,500 | US$ | 1,537 | N/A | US$ | 1,537 |
-46-
December 31, 2009 | ||||||||||||||||||||||
Held | Financial | Market Value or Net | ||||||||||||||||||||
Company | Marketable Securities | Relationship with | Statement | Shares/Units | Carrying Value | Percentage of | Asset Value | |||||||||||||||
Name | Type and Name | the Company | Account | (In Thousands) | (US$ in Thousands) | Ownership (%) | (US$ in Thousands) | Note | ||||||||||||||
Ubs Ag Stamford
|
| | 1,300 | US$ | 1,300 | N/A | US$ | 1,300 | ||||||||||||||
US Central Federal Cred
|
| | 4,800 | US$ | 4,799 | N/A | US$ | 4,799 | ||||||||||||||
Verizon Communications Inc.
|
| | 2,200 | US$ | 2,294 | N/A | US$ | 2,294 | ||||||||||||||
Verizon Global Fdg Corp.
|
| | 500 | US$ | 528 | N/A | US$ | 528 | ||||||||||||||
Wachovia Corp. New
|
| | 4,000 | US$ | 4,246 | N/A | US$ | 4,246 | ||||||||||||||
Wells Fargo + Company
|
| | 2,000 | US$ | 2,013 | N/A | US$ | 2,013 | ||||||||||||||
Westfield Cap Corp. Ltd.
|
| | 500 | US$ | 514 | N/A | US$ | 514 | ||||||||||||||
Westpac Banking Corp.
|
| | 2,100 | US$ | 2,112 | N/A | US$ | 2,112 | ||||||||||||||
Westpac Banking Corp.
|
| | 2,170 | US$ | 2,168 | N/A | US$ | 2,168 | ||||||||||||||
Nationwide Building Society
|
| Held-to-maturity financial assets | 8,000 | US$ | 8,000 | N/A | US$ | 8,008 | ||||||||||||||
Westpac Banking Corp. 12/12 Frn
|
| | 5,000 | US$ | 5,000 | N/A | US$ | 4,999 |
-47-
December 31, 2009 | ||||||||||||||||||||||
Held | Financial | Market Value or Net | ||||||||||||||||||||
Company | Marketable Securities | Relationship with | Statement | Shares/Units | Carrying Value | Percentage of | Asset Value | |||||||||||||||
Name | Type and Name | the Company | Account | (In Thousands) | (US$ in Thousands) | Ownership (%) | (US$ in Thousands) | Note | ||||||||||||||
Agency bond |
||||||||||||||||||||||
Fannif Mae
|
| Available-for-sale financial assets | 2,820 | US$ | 2,814 | N/A | US$ | 2,814 | ||||||||||||||
Fed Hm Ln Pc Pool 1b2830
|
| | 2,554 | US$ | 2,635 | N/A | US$ | 2,635 | ||||||||||||||
Fed Hm Ln Pc Pool 1g0115
|
| | 2,271 | US$ | 2,315 | N/A | US$ | 2,315 | ||||||||||||||
Fed Hm Ln Pc Pool 1k1210
|
| | 2,053 | US$ | 2,121 | N/A | US$ | 2,121 | ||||||||||||||
Fed Hm Ln Pc Pool 780741
|
| | 2,121 | US$ | 2,181 | N/A | US$ | 2,181 | ||||||||||||||
Federal Farm Cr Bks
|
| | 2,000 | US$ | 2,117 | N/A | US$ | 2,117 | ||||||||||||||
Federal Farm Credit Bank
|
| | 3,000 | US$ | 2,990 | N/A | US$ | 2,990 | ||||||||||||||
Federal Farm Credit Bank
|
| | 2,200 | US$ | 2,258 | N/A | US$ | 2,258 | ||||||||||||||
Federal Home Ln Bank
|
| | 11,000 | US$ | 11,028 | N/A | US$ | 11,028 | ||||||||||||||
Federal Home Ln Mtg Corp.
|
| | 1,350 | US$ | 1,352 | N/A | US$ | 1,352 | ||||||||||||||
Federal Home Ln Mtg Corp.
|
| | 3,421 | US$ | 3,533 | N/A | US$ | 3,533 | ||||||||||||||
Federal Home Ln Mtg Corp.
|
| | 2,662 | US$ | 2,763 | N/A | US$ | 2,763 | ||||||||||||||
Federal Home Ln Mtg Corp.
|
| | 2,469 | US$ | 2,521 | N/A | US$ | 2,521 | ||||||||||||||
Federal Home Ln Mtg Corp.
|
| | 2,309 | US$ | 2,350 | N/A | US$ | 2,350 | ||||||||||||||
Federal Home Ln Mtg Corp.
|
| | 2,358 | US$ | 2,448 | N/A | US$ | 2,448 | ||||||||||||||
Federal Home Loan Bank
|
| | 10,000 | US$ | 9,987 | N/A | US$ | 9,987 | ||||||||||||||
Federal Home Loan Bank
|
| | 8,000 | US$ | 7,992 | N/A | US$ | 7,992 | ||||||||||||||
Federal Home Loan Bank
|
| | 10,000 | US$ | 10,012 | N/A | US$ | 10,012 | ||||||||||||||
Federal Home Loan Bank
|
| | 4,700 | US$ | 4,715 | N/A | US$ | 4,715 | ||||||||||||||
Federal Home Loan Bank
|
| | 11,200 | US$ | 11,186 | N/A | US$ | 11,186 | ||||||||||||||
Federal Home Loan Bank
|
| | 3,310 | US$ | 3,319 | N/A | US$ | 3,319 | ||||||||||||||
Federal Home Loan Bank
|
| | 3,000 | US$ | 2,989 | N/A | US$ | 2,989 | ||||||||||||||
Federal Home Loan Bank
|
| | 3,000 | US$ | 2,983 | N/A | US$ | 2,983 | ||||||||||||||
Federal Home Loan Bank
|
| | 3,000 | US$ | 2,984 | N/A | US$ | 2,984 | ||||||||||||||
Federal Home Loan Mtg Corp.
|
| | 1,411 | US$ | 1,441 | N/A | US$ | 1,441 | ||||||||||||||
Federal Home Loan Mtg Corp.
|
| | 1,940 | US$ | 2,012 | N/A | US$ | 2,012 | ||||||||||||||
Federal National Mort Assoc
|
| | 2,117 | US$ | 2,176 | N/A | US$ | 2,176 | ||||||||||||||
Federal National Mort Assoc
|
| | 1,752 | US$ | 1,782 | N/A | US$ | 1,782 | ||||||||||||||
Federal Natl Mtg Assn Gtd Remi
|
| | 2,854 | US$ | 2,926 | N/A | US$ | 2,926 | ||||||||||||||
Federal Natl Mtg Assn Mtn
|
| | 2,669 | US$ | 2,765 | N/A | US$ | 2,765 | ||||||||||||||
Federal Natl Mtg Assn Remic
|
| | 2,871 | US$ | 2,953 | N/A | US$ | 2,953 | ||||||||||||||
Federal Natl Mtg Assn
|
| | 4,000 | US$ | 4,228 | N/A | US$ | 4,228 | ||||||||||||||
Federal Natl Mtge Assn
|
| | 2,039 | US$ | 2,126 | N/A | US$ | 2,126 | ||||||||||||||
Fhr 3087 Jb
|
| | 2,540 | US$ | 2,656 | N/A | US$ | 2,656 | ||||||||||||||
Fnma Pool 745688
|
| | 2,272 | US$ | 2,336 | N/A | US$ | 2,336 | ||||||||||||||
Fnma Pool 790772
|
| | 1,527 | US$ | 1,568 | N/A | US$ | 1,568 | ||||||||||||||
Fnma Pool 819649
|
| | 2,318 | US$ | 2,383 | N/A | US$ | 2,383 | ||||||||||||||
Fnma Pool 829989
|
| | 2,146 | US$ | 2,221 | N/A | US$ | 2,221 | ||||||||||||||
Fnma Pool 846233
|
| | 2,288 |