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UMC Reports Fourth Quarter 2016 Results

Company to ship 14nm customer wafers amid 1Q17 seasonal adjustment

Fourth Quarter 2016 Overview1:

TAIPEI, Taiwan — (BUSINESS WIRE) — January 23, 2017 — United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the fourth quarter of 2016.

Fourth quarter consolidated revenue was NT$38.31 billion, flat from NT$38.16 billion in 3Q16 and an increase of 13.2% YoY from NT$33.85 billion in 4Q15. 4Q16 consolidated gross margin was 22.9%. Net income attributable to the stockholders of the parent was NT$2.55 billion, with earnings per ordinary share of NT$0.21.

Mr. Po-Wen Yen, CEO of UMC, said, “In the fourth quarter of 2016, UMC’s revenue from foundry operations was NT$38.22 billion. Overall capacity utilization reached 94%, bringing wafer shipments to 1.66 million 8-inch equivalent wafers. Operating margin was 6.3%. During the quarter, our 28nm and 40nm utilization rate continued to exceed 90%, while strength in 8” consumer and communication demand raised 8” fab utilization to nearly 100%. We also realized a noteworthy milestone in November with the grand opening of our 300mm Fab 12X in Xiamen, China, which began shipping 40nm customer wafers just 20 months after the fab’s March 2015 groundbreaking. This site will ideally position UMC to capitalize on the vast business opportunities within China’s semiconductor market while bringing us closer to our Chinese customers, where our team can provide superior technical and manufacturing services and more efficiently bring new tape outs into production. With regard to our advanced 14nm technology, we have recently made substantial progress for this advanced node. Following intensive engineering activities with our customer, UMC’s 14nm transistor performance has delivered speed and leakage results which are comparable with the industry’s 14nm standards. Our yields have fulfilled customer requirements, and we anticipate 14nm wafer shipments to commence in 1Q17, highlighting our determined efforts to reach this important milestone.”

CEO Yen continued, “Looking into the first quarter of 2017, as we enter early year seasonality, we expect a sequential decrease in our foundry business. For full year 2017, UMC will continue to work towards a year of growth and prosperity. Our fundamental 28nm process technology know-how will enable our team to develop new manufacturing solutions on logic and specialty technology platforms. We will also expand 300mm capacity at Fab 12X to address growing customer wafer demand, increase our foundry market share and elevate the competitiveness of our foundry services. We believe these efforts will position UMC to capture the next wave of growth opportunities.”

Summary of Operating Results

Operating Results
(Amount: NT$ million)   4Q16   3Q16  

QoQ %
change

  4Q15  

YoY %
change

Net Operating Revenues   38,306     38,164     0.4     33,849     13.2  
Gross Profit   8,759     8,301     5.5     6,979     25.5  
Operating Expenses   (6,627 )   (6,373 )   4.0     (5,065 )   30.8  
Net Other Operating Income and Expenses   144     (443 )   -     (34 )   -  
Operating Income   2,276     1,485     53.3     1,880     21.1  
Net Non-Operating Income and Expenses   (1,210 )   466     -     906     -  
Net Income Attributable to Stockholders of the Parent   2,548     2,975     (14.4 )   3,160     (19.4 )

EPS (NT$ per share)

  0.21     0.24         0.25      

(US$ per ADS)

  0.033     0.037         0.039      

In 4Q16, net operating revenues increased 0.4% to NT$38.31 billion, including NT$38.22 billion from the foundry segment. Revenue from 28nm and 40nm contribution was 22% and 26% respectively. Gross profit was NT$8.76 billion, or 22.9% of revenue. Operating expenses increased 4.0% to NT$6.63 billion. Net other operating income was NT$144 million, leading to an operating income of NT$2.28 billion. Net non-operating expense was NT$1.21 billion. Net income attributable to stockholders of the parent was NT$2.55 billion.

Earnings per ordinary share for the quarter was NT$0.21. Earnings per ADS was US$0.033. The basic weighted average number of outstanding shares in 4Q16 was 12,208,239,978, compared with 12,208,239,978 shares in 3Q16 and 12,407,897,412 shares in 4Q15. The diluted weighted average number of outstanding shares was 13,442,173,503 in 4Q16, compared with 13,402,233,597 shares in 3Q16 and 13,601,975,910 shares in 4Q15. The fully diluted share count on December 31, 2016 was approximately 13,858,252,000. On December 31, 2016, UMC held 400 million treasury shares acquired from the 16th and 17th share buy-back programs.

Detailed Financials Section

Net operating revenues grew 0.4% to NT$38.31 billion. COGS slightly decreased to NT$29.55 billion, as depreciation was NT$11.31 billion, while other manufacturing costs decreased 1.9% to NT$18.23 billion. Gross profit was NT$8.76 billion, which included an insurance claim associated with the February 6, 2016 earthquake. Operating expenses grew 4.0% to NT$6.63 billion. G&A expense decreased 14% to NT$1.52 billion and Sales & Marketing grew to NT$1.28 billion. R&D expense increased 12.6% to NT$3.82 billion, or 10% of net operating revenues, which included an increase in R&D wafers. Net other operating income was NT$144 million, leading to an operating income of NT$2.28 billion.

COGS & Expenses

(Amount: NT$ million)

 

4Q16

 

3Q16

 

QoQ %
change

  4Q15  

YoY %
change

Net Operating Revenues

  38,306   38,164   0.4   33,849   13.2
COGS (29,547 ) (29,863 ) (1.1 ) (26,870 ) 10.0
Depreciation (11,314 ) (11,274 ) 0.4 (9,700 ) 16.6
Other Mfg. Costs (18,233 ) (18,589 ) (1.9 ) (17,170 ) 6.2
Gross Profit 8,759 8,301 5.5 6,979 25.5
Gross Margin (%) 22.9 % 21.8 % 20.6 %
Operating Expenses (6,627 ) (6,373 ) 4.0 (5,065 ) 30.8
G&A (1,521 ) (1,769 ) (14.0 ) (916 ) 66.0
Sales & Marketing (1,282 ) (1,207 ) 6.2 (1,044 ) 22.8
R&D (3,824 ) (3,397 ) 12.6 (3,105 ) 23.2
Net Other Operating

Income & Expenses

144 (443 ) - (34 ) -
Operating Income   2,276     1,485     53.3     1,880     21.1

Net non-operating expense in 4Q16 was NT$1.21 billion. Net investment loss was NT$1.14 billion, which included an NT$599 million impairment loss from holdings of Shandong Huahong Energy Invest Co.

Non-Operating Income and Expenses

(Amount: NT$ million)   4Q16   3Q16   4Q15
Non-Operating Income and Expenses   (1,210 )   466   906
Net Interest Income and Expenses (418 ) (326 ) (19 )
Net Investment Gain and Loss (1,138 ) 834 230
Gain and Loss on Disposal of Investment 1,023 304 376
Exchange Gain and Loss (496 ) (338 ) (35 )
Other Gain and Loss   (181 )   (8 )   354  

Cash inflow from operating activities reached NT$15.55 billion. Cash outflow from investing activities totaled NT$18.32 billion, including NT$21.88 billion in CAPEX spending for the foundry segment, resulting in a free cash outflow of NT$6.36 billion. Cash inflow from financing activities was NT$4.22 billion, mainly due to a cash inflow of NT$4.23 billion in bank loans. Net cash inflow for 4Q16 was NT$2.31 billion. Over the next 12 months, the company expects to repay NT$3 billion in bank loans.

Cash Flow Summary

(Amount: NT$ million)  

For the 3-Month
Period Ended
Dec. 31, 2016

 

For the 3-Month
Period Ended
Sep. 30, 2016

Cash Flow from Operating Activities   15,546   13,888
Net income before tax 1,066 1,951
Depreciation & Amortization 13,376 12,901
Gain on disposal of investments (1,023 ) (304 )
Impairment loss on financial assets 233 68
Impairment loss on non-financial assets 837 455
Exchange loss (gain) on financial assets and liabilities 1,114 (12 )
Changes in working capital (164 ) 559
Income tax paid (146 ) (1,688 )
Other 253 (42 )
Cash Flow from Investing Activities (18,321 ) (15,400 )
Capital expenditures (21,905 ) (19,862 )
Proceeds from disposal of AFS financial assets 1,582 594
Acquisition of investments accounted for under the equity method (840 ) -
Changes in refundable deposits 32 402
Acquisition of intangible assets (316 ) (567 )
Other 3,126 4,033
Cash Flow from Financing Activities 4,221 8,885
Bank loans 4,230 13,446
Increase in other financial liabilities - 2,345
Cash dividends - (6,907 )
Other (9 ) 1
Effect of Exchange Rate 867 (1,532 )
Net Cash Flow   2,313     5,841  

Cash and cash equivalents increased to NT$57.58 billion, mainly due to bank loans of NT$4.23 billion. Days of inventory remained at 53 days.

Current Assets
(Amount: NT$ billion)   4Q16   3Q16   4Q15
Cash and Cash Equivalents   57.58   55.27   53.29
Notes & Accounts Receivable 23.05 22.37 19.33
Days Sales Outstanding 54 56 53
Inventories, net 17.00 17.17 17.64
Days of Inventory 53 53 58
Total Current Assets   110.47   106.97   94.82

Current liabilities decreased to NT$71.98 billion, primarily reflecting the decrease in short-term credit. Long-term credit/bonds increased to NT$60.73 billion, mostly reflecting the long-term credit for United Semiconductor (Xiamen). Total liabilities increased to NT$167.91 billion, leading to a debt to equity ratio of 77%.

Liabilities
(Amount: NT$ billion)   4Q16   3Q16   4Q15
Total Current Liabilities   71.98   83.44   48.25
Notes & Accounts Payable 6.85 6.74 5.95
Short-Term Credit / Bonds 31.05 47.05 12.11
Payable on Equipment 15.04 14.45 14.66
Other 19.04 15.20 15.53
Long-Term Credit / Bonds 60.73 39.68 47.52
Long-Term Investment Liabilities 20.31 20.54 6.06
Total Liabilities 167.91 155.96 108.55
Debt to Equity   77 %   71 %   47 %

Analysis of Revenue2 for Foundry Segment

Revenue from North America and Asia Pacific accounted for 48% and 45% of 4Q16 sales, respectively.

Revenue Breakdown by Region
Region   4Q16   3Q16 2Q16   1Q16   4Q15
North America   48 %   52 % 49 %   48 %   47 %
Asia Pacific   45 %   42 % 45 %   45 %   37 %
Europe   4 %   4 % 4 %   3 %   6 %
Japan   3 %   2 % 2 %   4 %   10 %

28nm revenue contribution increased to 22% in 4Q16, reflecting stable wafer demand. 40nm accounted for 26% of sales as the wafer revenue from 28nm and 40nm remained at 48%.

Revenue Breakdown by Geometry
Geometry   4Q16   3Q16   2Q16   1Q16   4Q15
28nm and below   22 %   21 %   17 %   8 %   11 %
28nm<x<=40nm   26 %   27 %   26 %   29 %   24 %
40nm<x<=65nm   14 %   15 %   18 %   19 %   23 %
65nm<x<=90nm   3 %   4 %   4 %   4 %   4 %
90nm<x<=0.13um   11 %   11 %   11 %   12 %   12 %
0.13um<x<=0.18um   11 %   11 %   12 %   13 %   11 %
0.18um<x<=0.35um   10 %   8 %   9 %   12 %   12 %
0.5um and above   3 %   3 %   3 %   3 %   3 %

Revenue from fabless customers remained at 93% of revenue for 4Q16.

Revenue Breakdown by Customer Type
Customer Type   4Q16   3Q16   2Q16   1Q16   4Q15
Fabless   93 %   93 %   93 %   91 %   85 %
IDM   7 %   7 %   7 %   9 %   15 %

Revenue from the communication segment was 53% of sales, while consumer business remained at 26%. Computing segment increased to 13%, partly driven by tablet computing products.

Revenue Breakdown by Application (1)
Application   4Q16   3Q16   2Q16   1Q16   4Q15
Computer   13 %   12 %   11 %   15 %   11 %
Communication   53 %   55 %   55 %   48 %   52 %
Consumer   26 %   26 %   27 %   30 %   29 %
Others   8 %   7 %   7 %   7 %   8 %

(1) Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RW control ICs, PC chipset, audio codec, keyboard controller, monitor scaler, USB, I/O chipset. Communication consists of handset components, broadband, WLAN, bluetooth, Ethernet, LAN, DSP, etc. Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards, toys, etc.

Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) slightly decreased during 4Q16.

(To view ASP trend, visit http://www.umc.com/english/investors/4Q16_ASP_trend.asp)

Shipment and Utilization Rate3 for Foundry Segment

Wafer shipments increased 5.5% to 1,656K in 4Q16. Quarterly capacity increased 1.1% QoQ to 1,794K, leading to an overall utilization rate of 94% in 4Q16.

Wafer Shipments
    4Q16   3Q16   2Q16   1Q16   4Q15

Wafer Shipments
(8” K equivalents)

  1,656     1,569     1,514     1,432     1,384  
 
Quarterly Capacity Utilization Rate
    4Q16   3Q16   2Q16   1Q16   4Q15
Utilization Rate   94 %   89 %   89 %   82 %   83 %
Total Capacity
(8” K equivalents) 		  1,794     1,774     1,723     1,692     1,690  

Capacity4 for Foundry Segment

Overall capacity in the fourth quarter increased to 1,794K 8-inch equivalent wafers. Estimated capacity in the first quarter will slightly decrease to 1,749K 8-inch equivalent wafers, mainly due to capacity conversion to 40nm at Fab 12i and fewer working days.

Annual Capacity in
thousands of wafers

   

Quarterly Capacity in
thousands of wafers

FAB   Geometry
(um) 		  2016     2015     2014     2013   FAB   1Q17E   4Q16   3Q16   2Q16
WTK   6"   3.5 – 0.45   423     421     448     448   WTK   104   106   106   106
Fab 8A   8"   0.5 – 0.25   827     813     813     813   Fab 8A   204   207   207   207
Fab 8C   8"   0.35 – 0.11   348     347     347     347   Fab 8C   86   87   87   87
Fab 8D   8"   0.13 – 0.09   342     341     358     382   Fab 8D   84   86   86   86
Fab 8E   8"   0.5 – 0.18   419     418     418     418   Fab 8E   103   105   105   105
Fab 8F   8"   0.18 – 0.11   401     388     388     388   Fab 8F   100   102   102   100
Fab 8S   8"   0.18 – 0.11   336     335     335     335   Fab 8S   83   84   84   84
Fab 8N   8"   0.5 – 0.11   750     667     547     469   Fab 8N   185   188   188   188
Fab 12A   12"   0.13 – 0.028   885     793     700     651   Fab 12A   229   233   233   214
Fab 12i   12”   0.13 – 0.040   584     572     573     550   Fab 12i   137   148   148   144
Fab 12X   12”   0.040   9     -     -    

-

  Fab 12X   10   9   -   -
Total(1)   6,983     6,617     6,323     6,107   Total   1,749   1,794   1,774   1,723
YoY Growth Rate   6 %   5 %   4 %   11 %

(1)One 6-inch wafer is converted into 0.5625(62/82) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(122/82) 8-inch equivalent wafers. Capacity total figures are expressed in 8-inch equivalent wafers.

CAPEX for Foundry Segment

CAPEX spending in 4Q16 totaled US$689 million, bringing the spending for the full year 2016 to US$2.8 billion. Full year 2017 CAPEX plan is budgeted for US$2.0 billion.

Capital Expenditure by Year - in US$ billion
Year     2016     2015       2014     2013     2012
CAPEX   $ 2.8   $ 1.9     $ 1.4   $ 1.1   $ 1.7

2012 figures account for UMC parent company only.

2017 CAPEX Plan

8"   12"   Total
9 %   91 %   US$2.0 billion

Brief Summary of Full Year 2016 Consolidated Results

Operating Results

(Amount: NT$ million)

  2016     2015    

YoY %
change

Net Operating Revenues   147,870   144,830   2.1
Gross Profit 30,379 31,769 (4.4 )
Operating Expenses (23,922 ) (19,969 ) 19.8
Net Other Operating Income & Expenses (263 ) (964 ) (72.7 )
Operating Income 6,194 10,836 (42.8 )
Net Non-Operating Income & Expenses (1,347 ) 2,876 -
Income Tax Expenses (984 ) (876 ) 12.3
Net Income Attributable to Stockholders of the Parent 8,316 13,449 (38.2 )

EPS (NT$ per share)

0.68 1.08
(US$ per ADS)   0.105     0.167      

Annual Sales Breakdown in Revenue for Foundry Segment

Region   2016     2015  
North America   49 %   46 %
Asia Pacific   44 %   40 %
Europe   4 %   7 %
Japan   3 %   7 %
   
Technology   2016     2015  
28nm and below   17 %   10 %
28nm<x<=40nm   27 %   24 %
40nm<x<=65nm   16 %   22 %
65nm<x<=90nm   4 %   5 %
90nm<x<=0.13um   11 %   13 %
0.13um<x<=0.18um   12 %   11 %
0.18um<x<=0.35um   10 %   12 %
0.5um and above   3 %   3 %
 
Customer Type   2016     2015  
Fabless   92 %   88 %
IDM   8 %   12 %
 
Application   2016     2015  
Computer   13 %   12 %
Communication   53 %   54 %
Consumer   27 %   28 %
Others   7 %   6 %

First Quarter of 2017 Outlook & Guidance

Quarter-over-Quarter Guidance:

Recent Developments / Announcements

Dec 19, 2016

 

Cypress Ships MCUs Based on eCT Embedded Flash Manufactured at UMC

Nov 16, 2016

UMC Holds Grand Opening Ceremony for New 12-inch Wafer Fab in China

Oct 27, 2016

UMC Statement on Recent Media Report

Oct 26, 2016

UMC 3Q 2016 Financial Results

Please visit UMC’s website for further details regarding the above announcements

Conference Call / Webcast Announcement

Monday, January 23, 2017

Time: 5:00 PM (Taipei) / 4:00 AM (New York) / 09:00 AM (London)

Dial-in numbers and Access Codes:

USA Toll Free:

 

1-800 871-3110, 1-888 700-7397

Taiwan Number:

02-2192-8016

Other Areas:

+886-2-2192-8016

Access Code:

UMC

A live webcast and replay of the 4Q16 results announcement will be available at www.umc.com under the “Investors / Events” section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s robust foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include volume production 28nm gate-last High-K/Metal Gate technology, ultra-low power platform processes specifically engineered for Internet of Things (IoT) applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for production of ICs found in cars. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce over 500,000 wafers per month. The company employs nearly 19,000 people worldwide, with offices in Taiwan, China, Europe, Japan, Korea, Singapore, and the United States. UMC can be found on the web at http://www.umc.com

Note from UMC Concerning Forward-Looking Statements

Some of the statements in the foregoing announcement are forward-looking within the meaning of the U.S. Federal Securities laws, including statements about introduction of new services and technologies, future outsourcing, competition, wafer capacity, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Safe Harbor Statements

This release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and as defined in the United States Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by use of words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward-looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to: (i) dependence upon the frequent introduction of new services and technologies based on the latest developments in the industry in which UMC operates; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international business activities; (iv) dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including natural disasters, terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates. Further information regarding these and other risks is included in UMC’s filings with the United States Securities and Exchange Commission. All information provided in this release is as of the date of this release and are based on assumptions that UMC believes to be reasonable as of this date, and UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

The financial statements included in this release are prepared and published in accordance with Taiwan International Financial Reporting Standards, or TIFRSs, recognized by the Financial Supervisory Commission in the ROC, which is different from International Financial Reporting Standards, or IFRSs, issued by the International Accounting Standards Board. Investors are cautioned that there may be significant differences between TIFRSs and IFRSs. In addition, TIFRSs and IFRSs differ in certain significant respects from generally accepted accounting principles in the ROC and generally accepted accounting principles in the United States.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

- FINANCIAL TABLES TO FOLLOW -

1 Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending Dec 31, 2016, the three-month period ending Sep 30, 2016, and the equivalent three-month period that ended Dec 31, 2015. For all 4Q16 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Dec 31, 2016 exchange rate of NT$ 32.25 per U.S. Dollar.

2 Revenue in this section represents wafer sales

3 Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

4 Estimated capacity numbers are based on calculated maximum output rather than designed capacity. The actual capacity numbers may differ depending upon equipment delivery schedules, pace of migration to more advanced process technologies, and other factors affecting production ramp-up.

 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of December 31, 2016
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
   
 
December 31, 2016
US$ NT$ %
Assets
Current assets
Cash and cash equivalents 1,785 57,579 14.9 %
Financial assets at fair value through profit or loss, current 22 714 0.2 %
Notes & Accounts receivable, net 715 23,046 6.0 %
Inventories, net 527 16,998 4.4 %
Other current assets 376   12,133   3.1 %
Total current assets 3,425   110,470   28.6 %
 
Non-current assets
Funds and investments 1,078 34,766 9.0 %
Property, plant and equipment 6,976 224,983 58.2 %
Other non-current assets 510   16,436   4.2 %
Total non-current assets 8,564   276,185   71.4 %
Total assets 11,989   386,655   100.0 %
 
Liabilities
Current liabilities
Short-term loans 637 20,551 5.3 %
Financial liabilities at fair value through profit or loss, current 2 61 0.0 %
Payables 1,162 37,476 9.7 %
Current portion of long-term liabilities 326 10,501 2.7 %
Other current liabilities 105   3,389   0.9 %
Total current liabilities 2,232   71,978   18.6 %
 
Non-current liabilities
Bonds payable 1,069 34,482 8.9 %
Long-term loans 814 26,247 6.8 %
Other non-current liabilities 1,091   35,206   9.1 %
Total non-current liabilities 2,974   95,935   24.8 %
Total liabilities 5,206   167,913   43.4 %
 
Equity
Equity attributable to the parent company
Capital 3,915 126,243 32.7 %
Additional paid-in capital 1,271 40,997 10.6 %
Retained earnings, unrealized gain or loss on available-for-sale

financial assets and exchange differences on translation of

foreign operations

1,676 54,059 13.9 %
Treasury stock (146 ) (4,719 ) (1.2 %)
Total equity attributable to the parent company 6,716 216,580 56.0 %
Non-controlling interests 67   2,162   0.6 %
Total equity 6,783   218,742   56.6 %
Total liabilities and equity 11,989   386,655   100.0 %
           
Note：New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2016 exchange rate of NT $32.25 per U.S. Dollar.
 

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
               
 
Year over Year Comparison Quarter over Quarter Comparison
Three-Month Period Ended Three-Month Period Ended
December 31, 2016 December 31, 2015   Chg. December 31, 2016 September 30, 2016 Chg.
US$ NT$ US$ NT$ % US$ NT$ US$ NT$ %
Net operating revenues 1,188 38,306 1,050 33,849 13.2 % 1,188 38,306 1,183 38,164 0.4 %
Operating costs (916 ) (29,547 ) (834 ) (26,870 ) 10.0 % (916 ) (29,547 ) (926 ) (29,863 ) (1.1 %)
Gross profit 272   8,759   216   6,979   25.5 % 272   8,759   257   8,301   5.5 %
22.9 % 22.9 % 20.6 % 20.6 % 22.9 % 22.9 % 21.8 % 21.8 %
Operating expenses
- Sales and marketing expenses (40 ) (1,282 ) (32 ) (1,044 ) 22.8 % (40 ) (1,282 ) (37 ) (1,207 ) 6.2 %
- General and administrative expenses (47 ) (1,521 ) (29 ) (916 ) 66.0 % (47 ) (1,521 ) (55 ) (1,769 ) (14.0 %)
- Research and development expenses (118 ) (3,824 ) (96 ) (3,105 ) 23.2 % (118 ) (3,824 ) (105 ) (3,397 ) 12.6 %
Subtotal (205 ) (6,627 ) (157 ) (5,065 ) 30.8 % (205 ) (6,627 ) (197 ) (6,373 ) 4.0 %
Net other operating income and expenses 4   144   (1 ) (34 ) -   4   144   (14 ) (443 ) -  
Operating income 71 2,276 58 1,880 21.1 % 71 2,276 46 1,485 53.3 %
5.9 % 5.9 % 5.6 % 5.6 % 5.9 % 5.9 % 3.9 % 3.9 %
 
Net non-operating income and expenses (38 ) (1,210 ) 28   906   -   (38 ) (1,210 ) 14   466   -  
Income from continuing operations before

income tax

33 1,066 86 2,786 (61.7 %) 33 1,066 60 1,951 (45.4 %)
2.8 % 2.8 % 8.2 % 8.2 % 2.8 % 2.8 % 5.1 % 5.1 %
 
Income tax benefit (expense) (19 ) (617 ) 9   285   -   (19 ) (617 ) (6 ) (195 ) 216.4 %
Net income 14 449 95 3,071 (85.4 %) 14 449 54 1,756 (74.4 %)
1.2 % 1.2 % 9.1 % 9.1 % 1.2 % 1.2 % 4.6 % 4.6 %
 
Other comprehensive income (loss) (18 ) (591 ) 55   1,776   -   (18 ) (591 ) (68 ) (2,213 ) (73.3 %)
 
Total comprehensive income (loss) (4 ) (142 ) 150   4,847   -   (4 ) (142 ) (14 ) (457 ) (68.9 %)
 
Net income attributable to:
　　Stockholders of the parent 79 2,548 98 3,160 (19.4 %) 79 2,548 92 2,975 (14.4 %)
　　Non-controlling interests (65 ) (2,099 ) (3 ) (89 ) 2,258.4 % (65 ) (2,099 ) (38 ) (1,219 ) 72.2 %
 
Comprehensive income (loss) attributable to:
　　Stockholders of the parent 59 1,902 154 4,961 (61.7 %) 59 1,902 25 802 137.2 %
　　Non-controlling interests (63 ) (2,044 ) (4 ) (114 ) 1,693.0 % (63 ) (2,044 ) (39 ) (1,259 ) 62.4 %
 
Earnings per share-basic 0.007   0.21   0.008   0.25   0.007   0.21   0.007   0.24  
Earnings per ADS (2) 0.033   1.05   0.039   1.25   0.033   1.05   0.037   1.20  
Weighted average number of shares
outstanding (in millions) 12,208   12,408   12,208   12,208  
 
                                       
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2016 exchange rate of NT $32.25 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
       
For the Three-Month Period Ended For the Twelve-Month Period Ended
December 31, 2016 December 31, 2016
US$ NT$ % US$ NT$ %
Net operating revenues 1,188 38,306 100.0 % 4,585 147,870 100.0 %
Operating costs (916 ) (29,547 ) (77.1 %) (3,643 ) (117,491 ) (79.5 %)
Gross profit 272   8,759   22.9 % 942   30,379   20.5 %
 
 
Operating expenses
- Sales and marketing expenses (40 ) (1,282 ) (3.3 %) (142 ) (4,589 ) (3.1 %)
- General and administrative expenses (47 ) (1,521 ) (4.0 %) (180 ) (5,801 ) (3.9 %)
- Research and development expenses (118 ) (3,824 ) (10.0 %) (420 ) (13,532 ) (9.1 %)
Subtotal (205 ) (6,627 ) (17.3 %) (742 ) (23,922 ) (16.1 %)
Net other operating income and expenses 4   144   0.3 % (8 ) (263 ) (0.2 %)
Operating income 71 2,276 5.9 % 192 6,194 4.2 %
 
Net non-operating income and expenses (38 ) (1,210 ) (3.1 %) (42 ) (1,347 ) (0.9 %)
Income from continuing operations before

income tax

33 1,066 2.8 % 150 4,847 3.3 %
 
 
Income tax expense (19 ) (617 ) (1.6 %) (30 ) (984 ) (0.7 %)
Net income 14 449 1.2 % 120 3,863 2.6 %
 
Other comprehensive income (loss) (18 ) (591 ) (1.6 %) (136 ) (4,365 ) (2.9 %)
 
Total comprehensive income (loss) (4 ) (142 ) (0.4 %) (16 ) (502 ) (0.3 %)
 
Net income attributable to:
　　Stockholders of the parent 79 2,548 6.7 % 258 8,316 5.6 %
　　Non-controlling interests (65 ) (2,099 ) (5.5 %) (138 ) (4,453 ) (3.0 %)
 
Comprehensive income (loss) attributable to:
　　Stockholders of the parent 59 1,902 5.0 % 124 3,983 2.7 %
　　Non-controlling interests (63 ) (2,044 ) (5.4 %) (140 ) (4,485 ) (3.0 %)
 
Earnings per share-basic 0.007   0.21   0.021   0.68  
Earnings per ADS (2) 0.033   1.05   0.105   3.40  
 
Weighted average number of shares

outstanding (in millions)

12,208   12,289  
                       
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2016 exchange rate of NT $32.25 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Twelve-Month Period Ended December 31, 2016
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
   
US$ NT$
Cash flows from operating activities :
Net income before tax 150 4,847
Depreciation & Amortization 1,612 51,984
Gain on disposal of investments (65 ) (2,098 )
Changes in notes & accounts receivable (114 ) (3,690 )
Changes in prepayments (293 ) (9,456 )
Changes in payables 40 1,304
Changes in other current liabilities 43 1,398
Changes in assets, liabilities and others 139 4,483
Income tax paid (72 ) (2,322 )
Net cash provided by operating activities 1,440 46,450
 
Cash flows from investing activities :
Proceeds from disposal of available-for-sale financial assets 112 3,626
Acquisition of property, plant and equipment (2,839 ) (91,561 )
Acquisition of intangible assets (48 ) (1,554 )
Others 292   9,403  
Net cash used in investing activities (2,483 ) (80,086 )
 
Cash flows from financing activities :
Increase in short-term loans 469 15,129
Proceeds from long-term loans 764 24,629
Repayments of long-term loans (236 ) (7,624 )
Increase in other financial liabilities 495 15,979
Cash dividends (214 ) (6,907 )
Treasury stock acquired (74 ) (2,396 )
Others (1 ) (15 )
Net cash provided by financing activities 1,203 38,795
 
Effect of exchange rate changes on cash and cash equivalents (27 ) (870 )
Net Increase in cash and cash equivalents 133 4,289
 
Cash and cash equivalents at beginning of period 1,652   53,290  
 
Cash and cash equivalents at end of period 1,785   57,579  
 
         
Note: New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2016 exchange rate of NT $32.25 per U.S. Dollar.


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