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UMC Reports First Quarter 2018 Results

Proposed cash dividend of NT$0.70; company currently engaged in share buyback program

First Quarter 2018 Overview1:

TAIPEI, Taiwan — (BUSINESS WIRE) — April 25, 2018 — United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the first quarter of 2018.

First quarter consolidated revenue was NT$37.50 billion, up 2.4% from NT$36.63 billion in 4Q17 and flat YoY from NT$37.42 billion in 1Q17. Consolidated gross margin for 1Q18 was 12.4%. Net income attributable to stockholders of the parent was NT$3.40 billion, with earnings per ordinary share of NT$0.28.

Jason Wang, co-president of UMC, said, “In the first quarter of 2018, despite the unfavorable movement of the NT dollar, our foundry revenue increased 2.5% QoQ to NT$37.44 billion. Stable loading across 8" and mature 12" technologies resulted in an overall utilization rate of 94%, bringing wafer shipments to 1.75 million 8-inch equivalent wafers. Softening demand in smartphone and other wireless devices was more than offset by strength in the computer and consumer segments.”

Co-president Wang continued, “Looking into the second quarter, we anticipate our wafer shipments to increase, mainly due to growing business opportunities from wireless communication as well as computer peripheral related chip demand. As we secure new product tape outs across advanced and mature technologies including 28nm, we will leverage our collaborative efforts with customers supported by UMC’s manufacturing excellence to enhance our market share and financial results. While we focus on revenue and profit growth, we also seek to maximize shareholder returns. Subject to shareholders’ approval, the board of directors recently proposed a cash dividend distribution of approximately NT$0.70 per share, which constitutes around an 88% cash dividend payout ratio. In addition, we began our 18th share buyback program in March 8, 2018 and will complete the purchase of shares for cancellation by May 7, 2018. Moving forward, we will continue to improve UMC’s profitability and maintaining business growth to maximize benefits to our shareholders.”

______________________

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 March 31, 2018, the three-month period ending December 31, 2017, and the equivalent three-month period that ended March 31, 2017. For all 1Q18 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the March 31, 2018 exchange rate of NT$ 29.11 per U.S. Dollar.




Summary of Operating Results

Operating Results    
(Amount: NT$ million)     1Q18       4Q17       QoQ %
change 		      1Q17       YoY %
change
Net Operating Revenues     37,497       36,631       2.4       37,418       0.2
Gross Profit 4,642 6,298 (26.3 ) 7,428 (37.5 )
Operating Expenses (4,850 ) (5,198 ) (6.7 ) (6,211 ) (21.9 )
Net Other Operating Income and Expenses 977 801 22.0 154 534.4
Operating Income 769 1,901 (59.5 ) 1,371 (43.9 )
Net Non-Operating Income and Expenses 1,088 (152 ) - (304 ) -
Net Income Attributable to Stockholders of the Parent 3,400 1,771 92.0 2,286 48.7

EPS    (NT$ per share)

0.28 0.15 0.19

  (US$ per ADS)

    0.048         0.026                 0.033          
 

Net operating revenues in 1Q18 increased 2.4% to NT$37.50 billion, including NT$37.44 billion from the foundry segment. Revenue contribution from 40nm and below technologies remained flat at 44%. Gross profit declined 26.3% to NT$4.64 billion, or 12.4% of revenue. Operating expenses decreased 6.7% to NT$4.85 billion. Net other operating income was NT$977 million, leading to operating income of NT$0.77 billion. Net non-operating income was NT$1.09 billion. Net income attributable to stockholders of the parent was NT$3.40 billion.

Earnings per ordinary share for the quarter was NT$0.28. Earnings per ADS was US$0.048. The basic weighted average number of outstanding shares in 1Q18 was 12,202,773,078, compared with 12,208,239,978 shares in 4Q17 and 12,208,239,978 shares in 1Q17. The diluted weighted average number of outstanding shares was 13,457,161,259 in 1Q18, compared with 13,474,873,551 shares in 4Q17 and 13,418,016,296 shares in 1Q17. The fully diluted share count on March 31, 2018 was approximately 13,839,101,000. On March 31, 2018, UMC held 440 million treasury shares acquired from the 16th, 17th and 18th share buy-back programs.


Detailed Financials Section

Net operating revenues grew 2.4% to NT$37.50 billion. COGS increased to NT$32.86 billion, as depreciation increased 7.5% to NT$11.82 billion. Other manufacturing costs increased 8.8% to NT$21.04 billion mainly from higher wafer shipments. Gross profit was NT$4.64 billion. Operating expenses declined 6.7% to NT$4.85 billion. General and Administrative (G&A) expenses decreased 12.6% to NT$1.02 billion. Sales & Marketing declined 3.7% to NT$0.91 billion and R&D expense fell 5.4% to NT$2.92 billion, or 7.8% of net operating revenues. Net other operating income was NT$977 million, leading to an operating income of NT$769 million.

COGS & Expenses    
(Amount: NT$ million)     1Q18       4Q17       QoQ %
change 		      1Q17       YoY %
change
Net Operating Revenues     37,497       36,631       2.4       37,418       0.2
COGS (32,855 ) (30,333 ) 8.3 (29,990 ) 9.6
Depreciation (11,815 ) (10,990 ) 7.5 (11,032 ) 7.1
Other Mfg. Costs (21,040 ) (19,343 ) 8.8 (18,958 ) 11.0
Gross Profit 4,642 6,298 (26.3 ) 7,428 (37.5 )
Gross Margin (%) 12.4 % 17.2 % 19.9 %
Operating Expenses (4,850 ) (5,198 ) (6.7 ) (6,211 ) (21.9 )
G&A (1,017 ) (1,164 ) (12.6 ) (1,050 ) (3.1 )
Sales & Marketing (909 ) (944 ) (3.7 ) (1,170 ) (22.3 )
R&D (2,924 ) (3,090 ) (5.4 ) (3,991 ) (26.7 )
Net Other Operating

Income & Expenses

977 801 22.0 154 534.4
Operating Income     769         1,901         (59.5 )       1,371         (43.9 )
 
 

Net non-operating income in 1Q18 was NT$1.09 billion, which primarily resulted from NT$1.02 billion in exchange gain and NT$582 million in net investment gain, which were partially offset by a NT$529 million in net interest expenses.

Non-Operating Income and Expenses    
(Amount: NT$ million)     1Q18       4Q17       1Q17
Non-Operating Income and Expenses     1,088       (152 )       (304 )
Net Interest Income and Expenses (529 ) (542 ) (472 )
Net Investment Gain and Loss 582 (102 ) 654
Exchange Gain and Loss 1,021 500 (517 )
Other Gain and Loss     14         (8 )       31  
 
 

Cash inflow from operating activities was NT$8.78 billion. Cash inflow from investing activities amounted to NT$0.67 billion, including NT$5.72 billion in CAPEX spending for the foundry segment, resulting in free cash flow of NT$3.06 billion. Cash outflow from financing activities totaled NT$13.71 billion, mainly from NT$7.50 billion in redemption of bonds and NT$5.56 billion in bank loans. Net cash outflow in 1Q18 was NT$4.53 billion. Over the next 12 months, the company expects to repay NT$2.40 billion in bank loans.

Cash Flow Summary

   
(Amount: NT$ million)    

For the 3-Month

Period Ended
Mar. 31, 2018

 

     

For the 3-Month
Period Ended
Dec. 31, 2017

 

Cash Flow from Operating Activities     8,776       12,899
Net income before tax 1,857 1,749
Depreciation & Amortization 13,288 13,227

Net gain of financial assets and liabilities at FVTPL

(377 ) (86 )

Impairment loss on financial assets

- 254

Exchange gain on financial assets and liabilities

(1,356 ) (642 )
Changes in working capital (3,231 ) (655 )
Income tax paid (632 ) (152 )
Other (773 ) (796 )
Cash Flow from Investing Activities 666 (6,034 )
Capital expenditures (5,716 ) (10,961 )

Proceeds from disposal of AFS financial assets

- 313

Acquisition of intangible assets

(248 ) (360 )
Other 6,630 4,974
Cash Flow from Financing Activities (13,714 ) 5,214
Bank loans (5,561 ) (41 )
Bonds Issued - 5,400
Redemption of bonds (7,500 ) -
Other (653 ) (145 )
Effect of Exchange Rate (260 ) (343 )
Net Cash Flow     (4,532 )       11,736  
 
 

Cash and cash equivalents decreased to NT$77.14 billion. Days of inventory decreased to 49 days.

Current Assets    
(Amount: NT$ billion)     1Q18       4Q17       1Q17
Cash and Cash Equivalents     77.14       81.68       60.81
Notes & Accounts Receivable 25.01 20.97 20.88
Days Sales Outstanding 56 54 54
Inventories, net 17.14 18.26 16.26
Days of Inventory 49 53 51
Total Current Assets     136.42       139.16       111.54
 
 

Current liabilities decreased to NT$72.57 billion, mainly from a decrease in Short-Term Credit/Bonds. Total liabilities declined to NT$169.35 billion, leading to a debt to equity ratio of 78%.

Liabilities    
(Amount: NT$ billion)     1Q18       4Q17       1Q17
Total Current Liabilities     72.57       88.06       66.87
Notes & Accounts Payable 7.00 6.54 6.44
Short-Term Credit / Bonds 40.00 52.81 36.34
Payable on Equipment 2.97 4.67 6.41
Other 22.60 24.04 17.68
Long-Term Credit / Bonds 52.61 53.32 62.31
Long-Term Investment Liabilities 20.90 20.49 19.47
Total Liabilities 169.35 180.06 162.70
Debt to Equity     78%       84%       75%
 
 

Analysis of Revenue2 for Foundry Segment

Revenue from Asia Pacific increased to 47% while the contribution from North American customers declined to 42%. Revenue from Japan remained at 3%.

Revenue Breakdown by Region    
Region     1Q18       4Q17       3Q17       2Q17       1Q17
North America     42 %       43 %       43 %       42 %       41 %
Asia Pacific     47 %       45 %       47 %       47 %       50 %
Europe     8 %       9 %       8 %       7 %       5 %
Japan     3 %       3 %       2 %       4 %       4 %
                           
 

Business from 14nm remained unchanged at 2% of 1Q18 revenue, while 28nm contribution declined to 12%.

Revenue Breakdown by Geometry    
Geometry     1Q18       4Q17       3Q17       2Q17       1Q17
14nm and below     2 %       2 %       1 %       1 %       0 %
14nm<x<=28nm     12 %       15 %       15 %       17 %       17 %
28nm<x<=40nm     30 %       28 %       29 %       28 %       29 %
40nm<x<=65nm     13 %       12 %       12 %       12 %       13 %
65nm<x<=90nm     6 %       5 %       6 %       5 %       4 %
90nm<x<=0.13um     11 %       12 %       12 %       12 %       11 %
0.13um<x<=0.18um     13 %       13 %       12 %       12 %       13 %
0.18um<x<=0.35um     10 %       10 %       10 %       10 %       10 %
0.5um and above     3 %       3 %       3 %       3 %       3 %
                           
 

Fabless customers accounted for 92% of revenue in 1Q18.

Revenue Breakdown by Customer Type    
Customer Type       1Q18       4Q17       3Q17       2Q17       1Q17
Fabless       92 %       91 %       90 %       91 %       93 %
IDM       8 %       9 %       10 %       9 %       7 %
                             
 

Communication segment represented 47% of sales while revenue from consumer applications remained flat at 29%.

Revenue Breakdown by Application (1)    
Application     1Q18       4Q17       3Q17       2Q17       1Q17
Computer     14 %       13 %       14 %       14 %       12 %
Communication     47 %       49 %       47 %       48 %       51 %
Consumer     29 %       29 %       31 %       29 %       28 %
Others     10 %       9 %       8 %       9 %       9 %
                           
 

(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.
______________________
2 Revenue in this section represents wafer sales




Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) in 1Q18 declined slightly.

(To view ASP trend, visit http://www.umc.com/english/investors/1Q18_ASP_trend.asp)




Shipment and Utilization Rate3 for Foundry Segment

In 1Q18, wafer shipments grew 4.6% to 1,747K. Quarterly capacity declined slightly to 1.5% QoQ or 1,858K, resulting in an overall utilization rate of 94% in 1Q18.

Wafer Shipments    
      1Q18       4Q17       3Q17       2Q17       1Q17

Wafer Shipments
(8” K equivalents)

    1,747       1,670       1,748       1,741       1,678
 
Quarterly Capacity Utilization Rate
      1Q18       4Q17       3Q17       2Q17       1Q17
Utilization Rate     94%       90%       96%       96%       96%
Total Capacity
(8” K equivalents) 		    1,858       1,886       1,861       1,816       1,742
                           
 

3 Utilization Rate = Quarterly Wafer Out / Quarterly Capacity



Capacity4 for Foundry Segment

Total capacity during the first quarter totaled 1,858K 8-inch equivalent wafers. We foresee capacity in the second quarter to grow 3.1% QoQ to 1,916K 8-inch equivalent wafers, mostly from capacity expansion at Fab 12X.

Annual Capacity in
thousands of wafers

             

Quarterly Capacity in
thousands of wafers

   

FAB

      Geometry
(um) 		     

2017

      2016       2015       2014 FAB       2Q18E       1Q18       4Q17       3Q17
WTK   6"       3.5 – 0.45       422       423       421       448 WTK       106       104       106       106
Fab 8A   8"       0.5 – 0.25       825       827       813       813 Fab 8A       207       204       207       207
Fab 8C   8"       0.35 – 0.11       357       348       347       347 Fab 8C       92       91       92       92
Fab 8D   8"       0.13 – 0.09       341       342       341       358 Fab 8D       86       85       86       86
Fab 8E   8"       0.5 – 0.18       418       419       418       418 Fab 8E       105       103       105       105
Fab 8F   8"       0.18 – 0.11       417       401       388       388 Fab 8F       108       107       108       107
Fab 8S   8"       0.18 – 0.11       347       336       335       335 Fab 8S       93       92       93       87
Fab 8N   8"       0.5 – 0.11       753       750       667       547 Fab 8N       194       190       194       188
Fab 12A   12"       0.13 – 0.014       970       885       793       700 Fab 12A       250       246       250       247
Fab 12i   12"       0.13 – 0.040       537       584       572       573 Fab 12i       136       131       134       134
Fab 12X   12"       0.040 – 0.028       97       9       -       - Fab 12X       45       35       35       33
Total(1)       7,304       6,983       6,617       6,323 Total       1,916       1,858       1,886       1,861
YoY Growth Rate       5%       6%       5%       4%                        

(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 1Q18 was US$195 million. Full year 2018 CAPEX plan is budgeted for US$1.1 billion.

Capital Expenditure by Year - in US$ billion    
Year     2017       2016       2015       2014       2013
CAPEX     $ 1.4       $ 2.8       $ 1.9       $ 1.4       $ 1.1
                           

2018 CAPEX Plan

8"

           

12"

             

Total

33%

           

67%

             

US$1.1 billion

 

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.





Second Quarter of 2018 Outlook & Guidance

Quarter-over-Quarter Guidance:




Recent Developments / Announcements

Apr. 3, 2018        UMC Fab 12i Wins Singapore's Watermark Award

Mar. 7, 2018       UMC Board of Directors Announces Proposals for its Annual Shareholders Meeting


Jan. 24, 2018     UMC 4Q 2017 Financial Results

 

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


Conference Call / Webcast Announcement

Wednesday, April 25, 2018

Time: 5:00 PM (Taipei) / 5:00 AM (New York) / 10:00 AM (London)

Dial-in numbers and Access Codes:
USA Toll Free:        1-866 836-0101
Taiwan Number:     02-2192-8016
Other Areas:           +886-2-2192-8016

Access Code: UMC

A live webcast and replay of the 1Q18 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 comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include high volume 28nm High-K/Metal Gate technology, 14nm FinFET mass production, ultra-low power platform processes specifically developed for Internet of Things (IoT) applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce nearly 600,000 wafers per month. The company employs over 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 -

 
 

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES

Consolidated Condensed Balance Sheet
As of March 31, 2018
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
   
 
March 31, 2018
US$ NT$ %
Assets
Current assets
Cash and cash equivalents 2,650 77,143 20.0%
Financial assets at fair value through profit or loss, current 18 525 0.1%
Contract assets, current 5 135 0.0%
Notes & Accounts receivable, net 859 25,013 6.5%
Inventories, net 589 17,137 4.4%
Other current assets 565 16,468 4.4%
Total current assets 4,686 136,421 35.4%
 
Non-current assets
Funds and investments 1,239 36,079 9.4%
Property, plant and equipment 6,756 196,664 51.0%
Other non-current assets 564 16,396 4.2%
Total non-current assets 8,559 249,139 64.6%
Total assets 13,245 385,560 100.0%
 
Liabilities
Current liabilities
Short-term loans 693 20,168 5.2%
Contract liabilities, current 104 3,028 0.8%
Payables 837 24,375 6.3%
Current portion of long-term liabilities 681 19,829 5.2%
Other current liabilities 178 5,169 1.3%
Total current liabilities 2,493 72,569 18.8%
 
Non-current liabilities
Bonds payable 813 23,677 6.1%
Long-term loans 994 28,935 7.5%
Other non-current liabilities 1,518 44,167 11.5%
Total non-current liabilities 3,325 96,779 25.1%
Total liabilities 5,818 169,348 43.9%
 
Equity
Equity attributable to the parent company
Capital 4,337 126,243 32.7%
Additional paid-in capital 1,426 41,524 10.8%
Retained earnings, unrealized gains or losses on financial

assets measured at fair value through other comprehensive

income and exchange differences on translation of foreign

operations

1,840 53,561 13.9%
Treasury stock (183) (5,321) (1.4%)
Total equity attributable to the parent company 7,420 216,007 56.0%
Non-controlling interests 7 205 0.1%
Total equity 7,427 216,212 56.1%
Total liabilities and equity 13,245 385,560 100.0%
 
 
 
 
 
 
           
Note：New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2018 exchange rate of NT $29.11 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
March 31, 2018 March 31, 2017 Chg. March 31, 2018 December 31, 2017 Chg.
US$ NT$ US$ NT$ %   US$ NT$ US$ NT$ %  
Net operating revenues 1,288 37,497 1,285 37,418 0.2 % 1,288 37,497 1,258 36,631 2.4 %
Operating costs (1,129 ) (32,855 ) (1,030 ) (29,990 ) 9.6 % (1,129 ) (32,855 ) (1,042 ) (30,333 ) 8.3 %
Gross profit 159   4,642   255   7,428   (37.5 %) 159   4,642   216   6,298   (26.3 %)
12.4 % 12.4 % 19.9 % 19.9 % 12.4 % 12.4 % 17.2 % 17.2 %
Operating expenses
- Sales and marketing expenses (31 ) (909 ) (40 ) (1,170 ) (22.3 %) (31 ) (909 ) (33 ) (944 ) (3.7 %)
- General and administrative expenses (35 ) (1,017 ) (36 ) (1,050 ) (3.1 %) (35 ) (1,017 ) (40 ) (1,164 ) (12.6 %)
- Research and development expenses (101 ) (2,924 ) (137 ) (3,991 ) (26.7 %) (101 ) (2,924 ) (106 ) (3,090 ) (5.4 %)
Subtotal (167 ) (4,850 ) (213 ) (6,211 ) (21.9 %) (167 ) (4,850 ) (179 ) (5,198 ) (6.7 %)
Net other operating income and expenses 34   977   5   154   534.4 % 34   977   28   801   22.0 %
Operating income 26 769 47 1,371 (43.9 %) 26 769 65 1,901 (59.5 %)
2.1 % 2.1 % 3.7 % 3.7 % 2.1 % 2.1 % 5.2 % 5.2 %
 
Net non-operating income and expenses 38   1,088   (10 ) (304 ) -   38   1,088   (5 ) (152 ) -  
Income from continuing operations before

income tax

64 1,857 37 1,067 74.0 % 64 1,857 60 1,749 6.2 %
5.0 % 5.0 % 2.9 % 2.9 % 5.0 % 5.0 % 4.8 % 4.8 %
 
Income tax benefit (expense) 40   1,173   14   430   172.8 % 40   1,173   (19 ) (556 ) -  
Net income 104 3,030 51 1,497 102.4 % 104 3,030 41 1,193 154.0 %
8.1 % 8.1 % 4.0 % 4.0 % 8.1 % 8.1 % 3.3 % 3.3 %
 
Other comprehensive income (loss) (8 ) (234 ) (103 ) (2,997 ) (92.2 %) (8 ) (234 ) (47 ) (1,366 ) (82.9 %)
 
Total comprehensive income (loss) 96   2,796   (52 ) (1,500 ) -   96   2,796   (6 ) (173 ) -  
 
Net income attributable to:
　　Stockholders of the parent 117 3,400 79 2,286 48.7 % 117 3,400 61 1,771 92.0 %
　　Non-controlling interests (13 ) (370 ) (28 ) (789 ) (53.1 %) (13 ) (370 ) (20 ) (578 ) (36.0 %)
 
Comprehensive income (loss) attributable to:
　　Stockholders of the parent 108 3,158 (21 ) (599 ) - 108 3,158 14 416 659.1 %
　　Non-controlling interests (12 ) (362 ) (31 ) (901 ) (59.8 %) (12 ) (362 ) (20 ) (589 ) (38.5 %)
 
Earnings per share-basic 0.010   0.28   0.007   0.19   0.010   0.28   0.005   0.15  
Earnings per ADS (2) 0.048   1.40   0.033   0.95   0.048   1.40   0.026   0.75  
Weighted average number of shares
outstanding (in millions) 12,203   12,208   12,203   12,208  
 
                                                                             
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2018 exchange rate of NT $29.11 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 Three-Month Period Ended
March 31, 2018 March 31, 2018
US$ NT$ %   US$ NT$ %  
Net operating revenues 1,288 37,497 100.0 % 1,288 37,497 100.0 %
Operating costs (1,129 ) (32,855 ) (87.6 %) (1,129 ) (32,855 ) (87.6 %)
Gross profit 159   4,642   12.4 % 159   4,642   12.4 %
 
 
Operating expenses
- Sales and marketing expenses (31 ) (909 ) (2.4 %) (31 ) (909 ) (2.4 %)
- General and administrative expenses (35 ) (1,017 ) (2.7 %) (35 ) (1,017 ) (2.7 %)
- Research and development expenses (101 ) (2,924 ) (7.8 %) (101 ) (2,924 ) (7.8 %)
Subtotal (167 ) (4,850 ) (12.9 %) (167 ) (4,850 ) (12.9 %)
Net other operating income and expenses 34   977   2.6 % 34   977   2.6 %
Operating income 26 769 2.1 % 26 769 2.1 %
 
Net non-operating income and expenses 38   1,088   2.9 % 38   1,088   2.9 %
Income from continuing operations before

income tax

64 1,857 5.0 % 64 1,857 5.0 %
 
 
Income tax benefit 40   1,173   3.1 % 40   1,173   3.1 %
Net income 104 3,030 8.1 % 104 3,030 8.1 %
 
Other comprehensive income (loss) (8 ) (234 ) (0.6 %) (8 ) (234 ) (0.6 %)
 
Total comprehensive income (loss) 96   2,796   7.5 % 96   2,796   7.5 %
 
Net income attributable to:
　　Stockholders of the parent 117 3,400 9.1 % 117 3,400 9.1 %
　　Non-controlling interests (13 ) (370 ) (1.0 %) (13 ) (370 ) (1.0 %)
 
Comprehensive income (loss) attributable to:
　　Stockholders of the parent 108 3,158 8.4 % 108 3,158 8.4 %
　　Non-controlling interests (12 ) (362 ) (0.9 %) (12 ) (362 ) (0.9 %)
 
Earnings per share-basic 0.010   0.28   0.010   0.28  
Earnings per ADS (2) 0.048   1.40   0.048   1.40  
 
Weighted average number of shares

outstanding (in millions)

12,203   12,203  
                       
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2018 exchange rate of NT $29.11 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.

 
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Three-Month Period Ended March 31, 2018
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
 
US$ NT$
Cash flows from operating activities :
Net income before tax 64 1,857
Depreciation & Amortization 456 13,288
Exchange gain on financial assets and liabilities (47 ) (1,356 )
Changes in notes & accounts receivable (112 ) (3,268 )
Changes in inventory 33 953
Changes in contract liabilities (32 ) (919 )
Changes in assets, liabilities and others (61 ) (1,779 )
Net cash provided by operating activities 301 8,776
 
Cash flows from investing activities :
Acquisition of property, plant and equipment (196 ) (5,716 )
Acquisition of intangible assets (9 ) (248 )
Others 228   6,630  
Net cash provided by investing activities 23 666
 
Cash flows from financing activities :
Decrease in short-term loans (178 ) (5,179 )
Redemption of bonds (258 ) (7,500 )
Treasury stock acquired (20 ) (595 )
Others (15 ) (440 )
Net cash used in financing activities (471 ) (13,714 )
 
Effect of exchange rate changes on cash and cash equivalents (9 ) (260 )
Net decrease in cash and cash equivalents (156 ) (4,532 )
 
Cash and cash equivalents at beginning of period 2,806   81,675  
 
Cash and cash equivalents at end of period 2,650   77,143  
 
       
Note: New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2018 exchange rate of NT $29.11 per U.S. Dollar.


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