TSMC Annual Report > 2016 > Financial Highlights and Analysis > Financial Status and Operating Results

Financial Status and Operating Results

Financial Status

Consolidated

Unit: NT$ thousands

Item

2016

2015

Difference

%

Current Assets

817,729,126

746,743,991

70,985,135

10%

Long-term Investments (Note 1)

46,153,916

34,993,583

11,160,333

32%

Property, Plant and Equipmen

997,777,687

853,470,392

144,307,295

17%

Intangible Assets

14,614,846

14,065,880

548,966

4%

Other Assets (Note 2)

10,179,727

8,244,452

1,935,275

23%

Total Assets

1,886,455,302

1,657,518,298

228,937,004

14%

Current Liabilities

318,239,273

212,228,594

106,010,679

50%

Noncurrent Liabilities

178,164,903

222,655,225

(44,490,322)

-20%

Total Liabilities

496,404,176

434,883,819

61,520,357

14%

Capital Stock

259,303,805

259,303,805

0

0%

Capital Surplus

56,272,304

56,300,215

(27,911)

0%

Retained Earnings

1,072,008,169

894,293,586

177,714,583

20%

Others

1,663,983

11,774,113

(10,110,130)

-86%

Equity Attributable to Shareholders of the Parent

1,389,248,261

1,221,671,719

167,576,542

14%

Total Equity

1,390,051,126

1,222,634,479

167,416,647

14%

Note 1:

Long-term investments consist of noncurrent available-for-sale financial assets, held-to-maturity 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%

  • Increase in long-term investments: The increase was mainly due to increase in held-to-maturity financial assets.
  • Increase in other assets: The increase was mainly due to increase in deferred income tax assets.
  • Increase in current liabilities: The increase was mainly due to increase in payables to contractors and equipment suppliers and short-term loans.
  • Decrease in noncurrent liabilities: The decrease was mainly due to reclassification of bonds payable due in 1 year to current liabilities and decrease in guarantee deposits.
  • Increase in retained earnings: The increase was mainly due to net income of 2016, partially offset by distribution of 2015 earnings.
  • Decrease in others: The decrease was mainly due to decrease in currency exchange differences arising from translation of foreign operations in 2016.

● 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

2016

2015

Difference

%

Current Assets

443,781,164

426,913,080

16,868,084

4%

Long-term Investments (Note 1)

397,290,976

326,330,737

70,960,239

22%

Property, Plant and Equipmen

979,401,337

831,784,912

147,616,425

18%

Intangible Assets

10,047,991

9,391,418

656,573

7%

Other Assets (Note 2)

6,816,676

5,265,368

1,551,308

29%

Total Assets

1,837,338,144

1,599,685,515

237,652,629

15%

Current Liabilities

308,177,214

194,299,278

113,877,936

59%

Noncurrent Liabilities

139,912,669

183,714,518

(43,801,849)

-24%

Total Liabilities

448,089,883

378,013,796

70,076,087

19%

Capital Stock

259,303,805

259,303,805

0

0%

Capital Surplus

56,272,304

56,300,215

(27,911)

0%

Retained Earnings

1,072,008,169

894,293,586

177,714,583

20%

Others

1,663,983

11,774,113

(10,110,130)

-86%

Total Equity

1,389,248,261

1,221,671,719

167,576,542

14%

Note 1:

Long-term investments consist of held-to-maturity 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%

  • Increase in long-term investments: The increase was mainly due to increase in investments accounted for using equity method in 2016.
  • Increase in other assets: The increase was mainly due to increase in deferred income tax assets.
  • Increase in current liabilities: The increase was mainly due to increase in payables to contractors and equipment suppliers and short-term loans.
  • Decrease in noncurrent liabilities: The decrease was mainly due to reclassification of bonds payable due in 1 year to current liabilities and
  • decrease in guarantee deposits.
  • Increase in retained earnings: The increase was mainly due to net income of 2016, partially offset by distribution of 2015 earnings.
  • Decrease in others: The decrease was mainly due to decrease in currency exchange differences arising from translation of foreign operations in 2016.

● 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

2016

2015

Difference

%

Net Revenue

947,938,344

843,497,368

104,440,976

12%

Cost of Revenue

473,077,173

433,117,601

39,959,572

9%

Gross Profitbefore Realized Gross Profiton Sales to Associates

474,861,171

410,379,767

64,481,404

16%

Realized Gross Profiton Sales to Associates

(29,073)

15,126

(44,199)

-292%

Gross Profit

474,832,098

410,394,893

64,437,205

16%

Operating Expenses

96,904,133

88,466,500

8,437,633

10%

Other Operating Income and Expenses, Net

29,813

(1,880,618)

1,910,431

NM

Income from Operations

377,957,778

320,047,775

57,910,003

18%

Non-operating Income and Expenses

8,001,602

30,381,136

(22,379,534)

-74%

Income before Income Tax

385,959,380

350,428,911

35,530,469

10%

Income Tax Expenses

51,621,144

43,872,744

7,748,400

18%

Net Income

334,338,236

306,556,167

27,782,069

9%

Other Comprehensive Income, Net of Income Tax

(11,067,189)

(14,714,182)

3,646,993

25%

Total Comprehensive Income for the Year

323,271,047

291,841,985

31,429,062

11%

Total Net Income Attributable to Shareholders of the Parent

334,247,180

306,573,837

27,673,343

9%

Total Comprehensive Income Attributable to Shareholders of the Parent

323,186,736

291,867,757

31,318,979

11%

● Analysis of Deviation over 20%

  • Decrease in realized (unrealized) gross profit on sales to associates: The decrease was mainly due to higher sales to associates and defer recognition of gain in the fourth quarter of in 2016.
  • Decrease in non-operating income and expenses: The decrease was mainly due to lower gain on disposal of available-for-sale financial assets.
  • Increase in other comprehensive income, net of income tax: The increase was mainly due to unrealized gain from available-for-sale.
  • financial assets was realized to profit or loss upon disposal in 2015, partially offset by decrease in currency exchange differences arising from translation of foreign operations in 2016.

● 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

2016

2015

Difference

%

Net Revenue

936,387,291

837,046,888

99,340,403

12%

Cost of Revenue

474,552,913

439,356,165

35,196,748

8%

Gross Profitbefore Realized Gross Profiton Sales to Associates

461,834,378

397,690,723

64,143,655

16%

Realized Gross Profiton Sales to Associates

(26,082)

18,117

(44,199)

-244%

Gross Profit

461,808,296

397,708,840

64,099,456

16%

Operating Expenses

92,161,728

83,953,035

8,208,693

10%

Other Operating Income and Expenses, Net

83,965

(347,107)

431,072

NM

Income from Operations

369,730,533

313,408,698

56,321,835

18%

Non-operating Income and Expenses

15,458,427

36,579,970

(21,121,543)

-58%

Income before Income Tax

385,188,960

349,988,668

35,200,292

10%

Income Tax Expenses

50,941,780

43,414,831

7,526,949

17%

Net Income

334,247,180

306,573,837

27,673,343

9%

Other Comprehensive Income, Net of Income Tax

(11,060,444)

(14,706,080)

3,645,636

25%

Total Comprehensive Income for the Year

323,186,736

291,867,757

31,318,979

11%

● Analysis of Deviation over 20%

  • Decrease in realized (unrealized) gross profit on sales to subsidiaries and associates: The decrease was mainly due to higher sales to subsidiaries and associates and defer recognition of gain in the fourth quarter of 2016.
  • Decrease in non-operating income and expenses: The decrease was mainly due to lower share of profits of subsidiaries and associates in 2016.
  • Increase in other comprehensive income, net of income tax : The increase was mainly due to unrealized gain from available-for-sale financial assets of the subsidiary was realized to profit or loss upon disposal in 2015,partially offset by decrease in currency exchange differences arising from translation of foreign operations in 2016.

● 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
12/31/2015

Net Cash Provided by
Operating Activities in 2016

Net Cash Used in Investing and
Financing Activities in 2016

Cash Balance
12/31/2016

Remedy for Liquidity Shortfall

Investment Plan

Financing Plan

562,688,930

539,834,592

(561,269,689)

541,253,833

 None

 None

● Analysis of Cash Flow

  • NT$539.8 billion net cash generated by operating activities: mainly from net income and depreciation and amortization expenses.
  • NT$395.4 billion net cash used in investing activities: primarily for capital expenditures and net purchase of marketable financial instruments.
  • NT$165.8 billion net cash used in financing activities: primarily for cash dividend payment and repayment of corporate bonds, partially offset by the increase 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
12/31/2015

Net Cash Provided by
Operating Activities in 2016

Net Cash Used in Investing and
Financing Activities in 2016

Cash Balance
12/31/2016

Remedy for Liquidity Shortfall

Investment Plan

Financing Plan

264,493,583

532,547,786

(547,162,806)

249,878,563

 None

 None

● Analysis of Cash Flow

  • NT$532.5 billion net cash generated by operating activities: mainly from net income and depreciation and amortization expenses.
  • NT$321.9 billion net cash used in investing activities: primarily for capital expenditures.
  • NT$225.2 billion net cash used in financing activities: primarily for cash dividend payment and capital injection in subsidiaries.

● 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.

Recent Years Major Capital Expenditures and Impact on Financial and Business

Unit: NT$ thousands

Plan

Actual or Planned Source of Capital

Total Amount
for 2016 and 2015

Actual Use of Capital

2016

2015

Production Facilities, R&D and
Production Equipment

Cash flowgenerated from operations

578,773,185

325,471,832

253,301,353

Others

Cash flowgenerated from operations

6,788,920

2,573,438

4,215,482

Total

 

585,562,105

328,045,270

257,516,835

Based on capital expenditures listed above, TSMC's annual production capacity increased by approximately 1 million 12-inch equivalent wafers in 2016.

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 2016, the investment gain from these investments amounted to NT$14,941,372 thousand (NT$3,495,600 thousand on a consolidated basis), decreasing from previous year mainly due to the disposal gain of ASML shares recognized in 2015. For future investments, TSMC will continue to focus on strategic purposes through prudent assessments.