2015 TSMC Annual Report

• TSMC Vision, Mission & Core Values
• Letter to Shareholders
• Company Profile
  1. An Introduction to TSMC
  2. Market/Business Summary
  3. Organization
  4. Board Members
  5. Management Team
• Corporate Governance
  1. Overview
  2. Board of Directors
  3. Major Resolutions of Shareholders’ Meeting and Board Meetings
  4. Taiwan Corporate Governance Implementation as Required by the Taiwan Financial Supervisory Commission
  5. Code of Ethics and Business Conduct
  6. Regulatory Compliance
  7. Internal Control System Execution Status
  8. Status of Personnel Responsible for the Company’s Financial and Business Operation
  9. Information Regarding TSMC’s Independent Auditor
  10. Material Information Management Procedure
• Capital and Shares
  1. Capital and Shares
  2. Issuance of Corporate Bonds
  3. Preferred Shares
  4. Issuance of American Depositary Shares
  5. Status of Employee Stock Option Plan
  6. Status of Employee Restricted Stock
  7. Status of New Share Issuance in Connection with Mergers and Acquisitions
  8. Financing Plans and Implementation
• Operational Highlights
  1. Business Activities
  2. Technology Leadership
  3. Manufacturing Excellence
  4. Customer Trust
  5. Employees
  6. Material Contracts
• Financial Highlights and Analysis
  1. Financial Highlights
  2. Financial Status and Operating Results
  3. Risk Management
• Corporate Social Responsibility
  1. Overview
  2. Environmental, Safety and Health (ESH) Management
  3. TSMC Education and Culture Foundation
  4. TSMC Volunteer Program
  5. TSMC i-Charity
  6. Social Responsibility Implementation Status as Required by the Taiwan Financial Supervisory Commission
• Subsidiary Information and Other Special Notes
  1. Subsidiaries
  2. Status of TSMC Common Shares and ADRs Acquired, Disposed of, and Held by Subsidiaries
  3. Special Notes
• Financial Statements
  1. Consolidated Financial Statements for the Years Ended December 31, 2014 and 2013 and Independent Auditors’ Report
  2. Parent Company Only Financial Statements for the Years Ended December 31, 2014 and 2013 and Independent Auditors’ Report
• Contact Information
• Downloads
• Previous Annual Reports
• CHINESE

TSMC Annual Report >  2015 > Financial Highlights and Analysis > Financial Highlights

Financial Highlights

Condensed Balance Sheet

Condensed Balance Sheet from 2012 to 2015 (Consolidated) (Note 1)

Unit: NT$ thousands

Condensed Balance Sheet － 2011 (Consolidated)－R.O.C. GAAP

Unit: NT$ thousands

Condensed Balance Sheet from 2012 to 2015 (Unconsolidated) (Note 1)

Unit: NT$ thousands

Condensed Balance Sheet － 2011 (Unconsolidated)－R.O.C. GAAP

Unit: NT$ thousands

Condensed Statement of Comprehensive Income / Condensed Statement of Income

Condensed Statement of Comprehensive Income from 2012 to 2015 (Consolidated) (Note 1)

Unit: NT$ thousands (Except EPS: NT$)

Condensed Statement of Income － 2011 (Consolidated)－R.O.C. GAAP

Unit: NT$ thousands (Except EPS: NT$)

Condensed Statement of Comprehensive Income from 2012 to 2015 (Unconsolidated) (Note 1)

Unit: NT$ thousands (Except EPS: NT$)

Condensed Statement of Income － 2011 (Unconsolidated)－R.O.C. GAAP

Unit: NT$ thousands (Except EPS: NT$)

Financial Analysis

Financial Analysis from 2012 to 2015 (Consolidated) (Note 1)

*Glossary

• Capital Structure Analysis
  (1) Debt Ratio = Total Liabilities / Total Assets
  (2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment
• Liquidity Analysis
  (1) Current Ratio = Current Assets / Current Liabilities
  (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
  (3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses
• Operating Performance Analysis
  (1) Average Collection Turnover = Net Sales / Average Trade Receivables
  (2) Days Sales Outstanding = 365 / Average Collection Turnover
  (3) Average Inventory Turnover = Cost of Sales / Average Inventory
  (4) Average Inventory Turnover Days = 365 / Average Inventory Turnover
  (5) Average Payment Turnover = Cost of Sales / Average Trade Payables
  (6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment
  (7) Total Assets Turnover = Net Sales / Average Total Assets
• Profitability Analysis
  (1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets
  (2) Return on Equity Attributable to Shareholders of the Parent = Net Income Attributable to Shareholders of the Parent / Average Equity
  Attributable to Shareholders of the Parent
  (3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-in Capital
  (4) Pre-tax Income to Paid-in Capital Ratio = Income before Tax / Paid-in Capital
  (5) Net Margin = Net Income / Net Sales
  (6) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of
  Shares Outstanding
• Cash Flow
  (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities
  (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash
  Dividend
  (3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends)/ (Gross Property, Plant and Equipment +
  Long-term Investments + Other Noncurrent Assets + Working Capital)
• Leverage
  (1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations
  (2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

Financial Analysis － 2011 (Consolidated)－R.O.C. GAAP

*Glossary

• Capital Structure Analysis
  (1) Debt Ratio = Total Liabilities / Total Assets
  (2) Long-term Fund to Fixed Assets Ratio = (Shareholders’ Equity + Long-term Liabilities) / Net Fixed Assets
• Liquidity Analysis
  (1) Current Ratio = Current Assets / Current Liabilities
  (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
  (3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses
• Operating Performance Analysis
  (1) Average Collection Turnover = Net Sales / Average Trade Receivables
  (2) Days Sales Outstanding = 365 / Average Collection Turnover
  (3) Average Inventory Turnover = Cost of Sales / Average Inventory
  (4) Average Inventory Turnover Days = 365 / Average Inventory Turnover
  (5) Average Payment Turnover = Cost of Sales / Average Trade Payables
  (6) Fixed Assets Turnover = Net Sales / Average Net Fixed Assets
  (7) Total Assets Turnover = Net Sales / Average Total Assets
• Profitability Analysis
  (1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets
  (2) Return on Equity = Net Income / Average Shareholders’ Equity
  (3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-in Capital
  (4) Pre-tax Income to Paid-in Capital Ratio = Income before Tax / Paid-in Capital
  (5) Net Margin = Net Income / Net Sales
  (6) Earnings Per Share = (Net Income - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding
  
• Cash Flow
  (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities
  (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash
  Dividend
  (3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Fixed Assets + Long-term Investments +
  Other Assets + Working Capital)
  
• Leverage
  (1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations
  (2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

Financial Analysis from 2012 to 2015 (Unconsolidated) (Note)

*Glossary

• Capital Structure Analysis
  (1) Debt Ratio = Total Liabilities / Total Assets
  (2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment
• Liquidity Analysis
  (1) Current Ratio = Current Assets / Current Liabilities
  (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
  (3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses
• Operating Performance Analysis
  (1) Average Collection Turnover = Net Sales / Average Trade Receivables
  (2) Days Sales Outstanding = 365 / Average Collection Turnover
  (3) Average Inventory Turnover = Cost of Sales / Average Inventory
  (4) Average Inventory Turnover Days = 365 / Average Inventory Turnover
  (5) Average Payment Turnover = Cost of Sales / Average Trade Payables
  (6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment
  (7) Total Assets Turnover = Net Sales / Average Total Assets
• Profitability Analysis
  (1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets
  (2) Return on Equity = Net Income / Average Shareholders’ Equity
  (3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-in Capital
  (4) Pre-tax Income to Paid-in Capital Ratio = Income before Tax / Paid-in Capital
  (5) Net Margin = Net Income / Net Sales
  (6) Earnings Per Share = (Net Income - Preferred Stock Dividend) /Weighted Average Number of Shares Outstanding
  
• Cash Flow
  (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities
  (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash
  Dividend
  (3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends)/ (Gross Property, Plant and Equipment +
  Long-term Investments + Other Noncurrent Assets + Working Capital)
• Leverage
  (1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations
  (2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

Financial Analysis － 2011 (Unconsolidated)－R.O.C. GAAP

*Glossary

• Capital Structure Analysis
  (1) Debt Ratio = Total Liabilities / Total Assets
  (2) Long-term Fund to Fixed Assets Ratio = (Shareholders’ Equity + Long-term Liabilities) / Net Fixed Assets
• Liquidity Analysis
  (1) Current Ratio = Current Assets / Current Liabilities
  (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
  (3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses
• Operating Performance Analysis
  (1) Average Collection Turnover = Net Sales / Average Trade Receivables
  (2) Days Sales Outstanding = 365 / Average Collection Turnover
  (3) Average Inventory Turnover = Cost of Sales / Average Inventory
  (4) Average Inventory Turnover Days = 365 / Average Inventory Turnover
  (5) Average Payment Turnover = Cost of Sales / Average Trade Payables
  (6) Fixed Assets Turnover = Net Sales / Average Net Fixed Assets
  (7) Total Assets Turnover = Net Sales / Average Total Assets
• Profitability Analysis
  (1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets
  (2) Return on Equity = Net Income / Average Shareholders’ Equity
  (3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-in Capital
  (4) Pre-tax Income to Paid-in Capital Ratio = Income before Tax / Paid-in Capital
  (5) Net Margin = Net Income / Net Sales
  (6) Earnings Per Share = (Net Income - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding
  
• Cash Flow
  (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities
  (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash
  Dividend
  (3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Fixed Assets + Long-term Investments +
  Other Assets + Working Capital)
  
• Leverage
  (1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations
  (2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

Auditors’ Opinions from 2011 to 2015

Deloitte & Touche
12F, No. 156, Sec. 3, Min-Sheng E. Rd., Taipei, Taiwan, R.O.C.
Tel: 886-2-2545-9988

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2015 Business Report, Financial Statements, and proposal for allocation of profits. The CPA firm of Deloitte & Touche was retained to audit TSMC’s Financial Statements and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of Taiwan Semiconductor Manufacturing Company Limited. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Law, we hereby submit this report.

Taiwan Semiconductor Manufacturing Company Limited

Chairman of the Audit Committee: Sir Peter Leahy Bonfield

February 2, 2016

Financial Difficulties

The Company should disclose the financial impact to the Company if the Company and its affiliated companies have incurred any financial or cash flow difficulties in 2015 and as of the date of this Annual Report: None.

Consolidated Financial Statements and Independent Auditors’ Report along with Parent Company Only Financial Statements and Independent Auditors’ Report

Please refer to Annual Report section (II), Financial Statements.