Financial Status and Operating Results | Financial Highlights

Annual Reports > 2013 > Financial Highlights > Financial Status and Operating Results

Financial Status and Operating Results

Financial Status

Consolidated

Unit: NT$ thousands

Item	2013	2012	Difference	%
Current Assets	358,486,654	250,325,436	108,161,218	43%
Long-term Investments (Note 1)	89,183,810	65,717,240	23,466,570	36%
Property, Plant and Equipment	792,665,913	617,562,188	175,103,725	28%
Intangible Assets	11,490,383	10,959,569	530,814	5%
Other Assets (Note 2)	11,228,217	16,790,075	(5,561,858)	-33%
Total Assets	1,263,054,977	961,354,508	301,700,469	31%
Current Liabilities	189,777,934	148,473,947	41,303,987	28%
Noncurrent Liabilities	225,501,958	89,786,655	135,715,303	151%
Total Liabilities	415,279,892	238,260,602	177,019,290	74%
Capital Stock	259,286,171	259,244,357	41,814	0%
Capital Surplus	55,858,626	55,675,340	183,286	0%
Retained Earnings	518,193,152	408,411,468	109,781,684	27%
Equity Attributable to Shareholders of the Parent	847,508,255	720,550,680	126,957,575	18%
Total Equity	847,775,085	723,093,906	124,681,179	17%

Note 1:	Long-term investments consist of noncurrent available-for-sale financial assets, financial assets carried at cost and investments accounted for using equity method.
Note 2:	Other assets consist of deferred income tax assets, refundable deposits, and other noncurrent assets.

● Analysis of Deviation over 20%

The increase in current assets was mainly due to increase in cash and cash equivalents in 2013.
The increase in long-term investments was mainly due to increase in fair value of available-for-sale financial assets in 2013.
The increase in property, plant and equipment was mainly due to acquisition of advanced technology equipment during 2013.
The decrease in other assets was mainly due to decrease in deferred income tax assets.
The increase in total assets was mainly due to increase in cash and cash equivalents and property, plant and equipment.
The increase in current liabilities was mainly due to increase in payables to contractors and equipment suppliers and income tax payable, partially offset by decrease in short-term loans.
The increase in noncurrent liabilities was mainly due to issuance of corporate bonds of NT$130.8 billion in 2013.
The increase in total liabilities was mainly due to increase in noncurrent liabilities.
The increase in retained earnings was mainly due to net income of 2013, partially offset by distribution of 2012 earnings.

● Major Impact on Financial Position

The above deviations had no major impact on TSMC’s financial position.

● Future Plan on Financial Position:

Not applicable.

Unconsolidated

Unit: NT$ thousands

Item	2013	2012	Difference	%
Current Assets	257,623,763	205,819,614	51,804,149	25%
Long-term Investments (Note 1)	165,545,159	139,634,200	25,910,959	19%
Property, Plant and Equipment	770,443,494	586,636,036	183,807,458	31%
Intangible Assets	7,069,456	6,449,837	619,619	10%
Other Assets (Note 2)	7,897,131	13,597,966	(5,700,835)	-42%
Total Assets	1,208,579,003	952,137,653	256,441,350	27%
Current Liabilities	187,195,744	144,528,616	42,667,128	30%
Noncurrent Liabilities	173,875,004	87,058,357	86,816,647	100%
Total Liabilities	361,070,748	231,586,973	129,483,775	56%
Capital Stock	259,286,171	259,244,357	41,814	0%
Capital Surplus	55,858,626	55,675,340	183,286	0%
Retained Earnings	518,193,152	408,411,468	109,781,684	27%
Total Equity	847,508,255	720,550,680	126,957,575	18%

Note 1:	Long-term investments consist of financial assets carried at cost and investments accounted for using equity method.
Note 2:	Other assets consist of deferred income tax assets, refundable deposits, and other noncurrent assets

● Analysis of Deviation over 20%

The increase in current assets was mainly due to increase in cash and cash equivalents in 2013.
The increase in property, plant and equipment was mainly due to acquisition of advanced technology equipment during 2013.
The decrease in other assets was mainly due to decrease in deferred income tax assets.
The increase in total assets was mainly due to increase in cash and cash equivalents and property, plant and equipment.
The increase in current liabilities was mainly due to increase in payables to contractors and equipment suppliers and income tax payable, partially offset by decrease in short-term loans.
The increase in noncurrent liabilities was mainly due to issuance of corporate bonds of NT$86.2 billion in 2013.
The increase in total liabilities was mainly due to increase in noncurrent liabilities.
The increase in retained earnings was mainly due to net income of 2013, partially offset by distribution of 2012 earnings.

● Major Impact on Financial Position

The above deviations had no major impact on TSMC’s financial position.

● Future Plan on Financial Position:

Not applicable.

Financial Performance

Consolidated

Unit: NT$ thousands

Item	2013	2012	Difference	%
Net Revenue	597,024,197	506,745,234	90,278,963	18%
Cost of Revenue	316,057,820	262,583,098	53,474,722	20%
Gross Profit before Unrealized Gross Profit on Sales to Associates	280,966,377	244,162,136	36,804,241	15%
Unrealized Gross Profit on Sales to Associates	(20,870)	(25,029)	4,159	-17%
Gross Profit	280,945,507	244,137,107	36,808,400	15%
Operating Expenses	71,563,234	62,510,875	9,052,359	14%
Other Operating Income and Expenses, Net	47,090	(449,364)	496,454	NM (Note)
Income from Operations	209,429,363	181,176,868	28,252,495	16%
Non-operating Income and Gains	6,057,759	499,588	5,558,171	1113%
Income before Income Tax	215,487,122	181,676,456	33,810,666	19%
Income Tax Expenses	27,468,185	15,552,654	11,915,531	77%
Net Income	188,018,937	166,123,802	21,895,135	13%
Other Comprehensive Income, Net of Income Tax	16,352,248	4,252,632	12,099,616	285%
Total Comprehensive Income for the Year	204,371,185	170,376,434	33,994,751	20%
Total Net Income Attributable to Shareholders of the Parent	188,146,790	166,318,286	21,828,504	13%
Total Comprehensive Income Attributable to Shareholders of the Parent	204,505,782	170,521,543	33,984,239	20%

Note: NM stands for non-meaningful.

● Analysis of Deviation over 20%

Increase in cost of revenue: The increase was mainly due to higher sales.
Increase in other operating income and expenses, net: The increase was mainly due to impairment loss related to property, plant and equipment recognized in 2012.
Increase in non-operating income and gains: The increase was primarily due to increase in earnings of equity method investees, lower impairment loss of financial assets recognized in 2013, partially offset by higher interest expenses for corporate bonds in 2013.
Increase in income tax expenses: The increase was mainly due to higher taxable income, the AMT tax rate changed from 10% to 12% and increase in income tax on unappropriated earnings.
Increase in other comprehensive income, net of income tax: The increase was mainly due to exchange rate differences arising from translation of foreign operations and the increase in fair value of available-for-sale financial assets in 2013.
Increase in total comprehensive income and total comprehensive income attributable to shareholders of the parent: The increase was mainly due to higher net income and other comprehensive income in 2013.

● Sales Volume Forecast and Related Information

For additional details, please refer to “ Letter to Shareholders” of this Annual Report..

● Major Impact on Financial Performance

The above deviations had no major impact on TSMC’s financial performance.

● Future Plan on Financial Performance:

Not applicable.

Unconsolidated

Unit: NT$ thousands

Item	2013	2012	Difference	%
Net Revenue	591,087,600	500,369,525	90,718,075	18%
Cost of Revenue	319,407,163	265,494,185	53,912,978	20%
Gross Profit before Unrealized Gross Profit on Sales to Subsidiaries and Associates	271,680,437	234,875,340	36,805,097	16%
Unrealized Gross Profit on Sales to Subsidiaries and Associates	(35,577)	(25,029)	(10,548)	42%
Gross Profit	271,644,860	234,850,311	36,794,549	16%
Operating Expenses	66,924,354	57,481,083	9,443,271	16%
Other Operating Income and Expenses, Net	(66,614)	(549,087)	482,473	-88%
Income from Operations	204,653,892	176,820,141	27,833,751	16%
Non-operating Income and Gains	11,062,658	6,932,246	4,130,412	60%
Income before Income Tax	215,716,550	183,752,387	31,964,163	17%
Income Tax Expenses	27,569,760	17,434,101	10,135,659	58%
Net Income	188,146,790	166,318,286	21,828,504	13%
Other Comprehensive Income, Net of Income Tax	16,358,992	4,203,257	12,155,735	289%
Total Comprehensive Income for the Year	204,505,782	170,521,543	33,984,239	20%

● Analysis of Deviation over 20%

Increase in cost of revenue: The increase was mainly due to higher sales.
Increase in unrealized gross profit on sales to subsidiaries and associates: The increase was mainly due to higher sales to subsidiaries and associates in the fourth quarter 2013.
Decrease in other operating income and expenses, net: The decrease was mainly due to property, plant and equipment impairment loss during 2012.
Increase in non-operating income and gains: The increase was primarily due to increase in earnings of equity method, less impairment loss of financial assets recognized in 2013, partially offset by higher interest expenses for corporate bonds in 2013.
Increase in income tax expenses: The increase was mainly due to higher taxable income, the AMT tax rate changed from 10% to 12% and income tax on unappropriated earnings.
Increase in other comprehensive income, net of income tax: The increase was mainly due to exchange rate differences arising from translation of foreign operations and the increase in other comprehensive income of subsidiaries and associates in 2013.
Increase in total comprehensive income: The increase was mainly due to higher net income and other comprehensive income in 2013.

● Sales Volume Forecast and Related Information

For additional details, please refer to “Letter to Shareholders” of this Annual Report.

● Major Impact on Financial Performance

The above deviations had no major impact on TSMC’s financial performance.

● Future Plan on Financial Performance:

Not applicable.

Cash Flow

Consolidated

Unit: NT$ thousands

Cash Balance 12/31/2012	Net Cash Provided by Operating Activities in 2013	Net Cash Used in Investing and Financing Activities in 2013	Cash Balance 12/31/2013	Remedy for Liquidity Shortfall
Cash Balance 12/31/2012	Net Cash Provided by Operating Activities in 2013	Net Cash Used in Investing and Financing Activities in 2013	Cash Balance 12/31/2013	Investment Plan	Financing Plan
143,410,588	347,383,537	(248,098,678)	242,695,447	None	None

● Analysis of Cash Flow

NT$347.4 billion net cash generated by operating activities: mainly from net income and depreciation/amortization.
NT$281.1 billion net cash used in investing activities: primarily for capital expenditures.
NT$33 billion net cash generated by financing activities: mainly from issuance of corporate bonds, partially offset by payment of cash dividends and decrease in short-term loans.

● Remedial Actions for Liquidity Shortfall:

As a result of positive operating cash flows and cash on-hand, remedial actions are not required.

● Cash Flow Projection for Next Year:

Not applicable.

Unconsolidated

Unit: NT$ thousands

Cash Balance 12/31/2012	Net Cash Provided by Operating Activities in 2013	Net Cash Used in Investing and Financing Activities in 2013	Cash Balance 12/31/2013	Remedy for Liquidity Shortfall
Cash Balance 12/31/2012	Net Cash Provided by Operating Activities in 2013	Net Cash Used in Investing and Financing Activities in 2013	Cash Balance 12/31/2013	Investment Plan	Financing Plan
109,150,810	335,283,326	(297,995,368)	146,438,768	None	None

● Analysis of Cash Flow

NT$335.3 billion net cash generated by operating activities: mainly from net income and depreciation/amortization.
NT$284.4 billion net cash used in investing activities: primarily for capital expenditures.
NT$13.6 billion net cash used in financing activities: mainly from payment of cash dividends and decrease in short-term loans, partially offset by issuance of corporate bonds.

● Remedial Actions for Liquidity Shortfall:

As a result of positive operating cash flows and cash on-hand, remedial actions are not required.

● Cash Flow Projection for Next Year:

Not applicable.

Major Capital Expenditures and Impact on Financial and Business

Unit: NT$ thousands

Plan	Actual or Planned Source of Capital	Total Amount as of 12/31/2013	Actual Use of Capital
Plan	Actual or Planned Source of Capital	Total Amount as of 12/31/2013	2013	2012
Production Facilities, R&D and Production Equipment	Cash flow generated from operations and issuance of corporate bonds	527,715,597	283,822,265	243,893,332
Others	Cash flow generated from operations	6,016,537	3,772,508	2,244,029
Total		533,732,134	287,594,773	246,137,361

Based on capital expenditures listed above and projected for 2014, it is estimated that TSMC’s annual production capacity will increase by approximately 1.64 million 8-inch equivalent wafers in 2014.

Long-term Investment Policy and Results

TSMC’s long-term investments, accounted for under the equity method, were all made for strategic purposes. However, when an investment is no longer of strategic value, it may be considered a financial investment. In 2013, the investment gain from these investments amounted to NT$9,530,933 thousand (NT$3,972,031 thousand on a consolidated basis), increasing significantly compared to 2012 mainly due to the high growth of mobile computing products and the recovery of solar market. For future investments, TSMC will continue to focus on strategic purposes through prudent assessments.